Shipping Stocks Ready to Break Out
As I mentioned last time, the Baltic Dry Index (BDI) tracks worldwide international shipping prices of various dry bulk cargoes, and is a gauge of global supply and demand for these commodities. The steady rise in the BDI we've witnessed lately is seen by many as a key indicator of an increasing world commodity trade.
More importantly to us, though, the BDI is considered to be a sort of industry thermometer, and a leading indicator as to the behavior of stocks in this sector.
After experiencing a decline, the BDI is now going approaching the highs of two months ago, and I believe we are about to witness a parabolic rally
The BDI has seen some milestone developments in the past two weeks. It is up almost 25% since the time I wrote the last article, and it has risen the past 11 trading days in a row. And the index is attempting to break out of a bullish continuation falling wedge pattern.
Like I said, the BDI is a great leading indicator for shipping stocks. With the index poised to break out, we could also see explosive moves in individual stocks.
The stocks in this sector now have the momentum to make the wild 10% intraday moves up like they did earlier in the year when the BDI showed the same chart pattern that it is displaying now.
