Courage Marine: Bought more at 10c per share.

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?

Double dip recession or just very slow growth?

Stock markets around the world had a very bad week. Everyone it seems is expecting a global recession and the accompanying deflation.

In a truly deflationary environment, all assets will suffer and see their prices fall. Equities and precious metals were all sold down across the board, therefore.

However, reading an article in Bloomberg, it is interesting to note that in the USA, "railroads shipments are the highest in almost three years." This defies concerns of an impending double dip recession.

Art Hatfield, a transportation analyst in Memphis, Tennessee, at Morgan Keegan & Co: “We’re not seeing declines in rail volumes that are synonymous with a recession... We remain in a slow growth environment.”
Read article: here.

If we were to look at the Baltic Dry Index (BDI), we see it rising in recent weeks and I wrote a piece on whether it could be time to load up on shares of Courage Marine again not too long ago.

The suggestion is that there is an increase in demand for shipping capacity and because "dry bulk primarily consists of materials that function as raw material inputs to the production of intermediate or finished goods, ... the index is also seen as an efficient economic indicator of future economic growth and production. The BDI is termed a leading economic indicator because it predicts future economic activity." Source: Wikipedia.

So, is there going to be a double dip recession after all? There are analysts who believe that a recession is a given and some who believe that Europe will get its act together and a recession will be averted. With such conflicting signs, at this point in time, however, it is just a sea of opinions.

Personally, I do not believe in being overly bullish or overly bearish. I believe in being pragmatic. Putting all our chips on a single bet either way could be quite disastrous if we should be proven wrong.

What is being pragmatic? Knowing what the current conditions are, what kind of investments are likely to do better and act accordingly. It is about wealth preservation, if not growth.

Related posts:
1. Courage Marine: Added at 10.5c a share.
2. Should we be staying invested or in cash?
3. Sleep well at night with a plan.
4. Why do I not panic?