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For a while, it looked as if a double top was forming in the Baltic Dry Index (BDI). Well, the potential double top formation has been negated as the BDI broke resistance and looks set to form a higher high.
As most of Courage Marine's business is on a per trip basis and at spot rate, a higher BDI is good news for the company. If the BDI continues to rise into winter, it could turn out to be quite a good quarter for Courage Marine and it looks like it could happen.
Bloomberg reported earlier in the year that freight rates are poised to rise after hitting a two year low as owners of ships carrying coal and iron ore scrapped the most vessels in 28 years. Indeed, Courage Marine recently sold one of its vessels to be scrapped as well. Also, Malaysian Bulker Carrier predicted that the dry bulk market could do well in the medium term due to Japan increasing imports of coal.
Technically, the MACD has been rising since plunging to a low in negative territory in mid August 2011. Although momentum is still negative, the rising MACD suggests that momentum is improving.
If we believe that Courage Marine's share price is currently range bound without any trend, looking at the Stochastics reveals that momentum is closer to the lower end of the range, although not oversold. Any further upward movement in price could find initial resistance at 11c while support is at 9.5c.
Related posts:
1. Courage Marine: Added at 10.5c per share.
2. Double dip recession or just very slow growth?
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