Friday, October 23, 2009

Baltic Dry Index ($BDI)

Today's chart looks at the underlying sector chart for dry bulk shipping, the Baltic Dry Index ($BDI). In a recent Business Insider report ~link~, Drewry painted a positive recovery for shipping in 2010. It pointed out that in 2009 rates declined 27% & for 2010 it should rise (in context) 18%. Meaning that the $BDI has further to rise as well as Itz Pix Genco Shipping ($BDI). That said the 2nd half of 2009 is still projected to slightly recover, and we could see a pullback in GNK with in the asymmetrical triangle formation.
In the chart below I used a comparison against the $BDI, the FXI of iShares China, since most commodities and manufactured good are driven by the China trade. Note how the FXI has remained resilient!
Again, I'm bullish on GNK longer term, it may pullback to the $20/$21 level near term. Recently entered @ $22.90 with a covered call (Jan $25) reducing the cost basis to $21.20 [see previous posts]
Genco reports earnings on Oct. 29th
*click on chart to expand image
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