Everything in Ship Shape

JC Parets
September 16, 2021

We live in a world where everything is connected. We have access to the globe as a whole, be that for information, goods, or services.

This is the theme we want to touch upon today. In the post-pandemic era, our definitions of normal have changed several times. Consumer patterns have changed drastically with every version of normal. So why is it that we're discussing this today?

The cost of transportation of goods has skyrocketed, thanks to a variety of reasons. A direct impact of this, of course, would be on the constituents of this unique group.

So we thought this would be a good time to analyse this space and see if there's anything worth looking into here.

At All Star Charts, we enjoy making custom indices and looking out for developing patterns in all the sectors (grouped or ungrouped). We're happy to put together a family of stocks that belong to the same category and study the impact or trend of that particular index. We're doing just that!

Here we have the ASC equal-weighted Shipping and Logistics Index. As clear as this chart can be, it's trading at an all-time high. This has come on the back of a close to three-year base breakout. What we also saw was the classic strong breakout behaviour whereby the line chart consolidated above the crucial level of resistance.

Click on the image to zoom in.

So this is what we're seeing in our economy. But what about the global economy? Are we seeing the same trend develop there?

Yup!

The demand for shipping raw materials and goods around the world continues to make new highs. The best representation of this is the chart below. The Baltic Dry Index averages the prices for shipping dry bulk materials and is often seen as a leading economic indicator. While a 10-year base breakout has already come through in this index, the price is still within a bigger base pattern.

From current levels, the next level to track would be close to 2,680. These are the highs we saw in 2009 and would be a crucial area to observe.

So this is great. Shipping and Logistics as a sector is doing well. But what's in it for you?

Stocks, of course! Here are a select few stocks that could potentially generate good returns in the weeks and months ahead.

Let's take a look at what we have here then.

Adani Ports has been a front runner for some time now until the Group stocks took a beating recently. But looks like the upward trajectory may be back.

The price faced resistance at a key Fibonacci level in the recent past. However, as long as the price manages to sustain above the risk management level of 675, the target to track would be near 855.

Bluedart has also broken out of a five-year base and looks good for the next leg of the rally. The indicator is making its way into positive territory as well.

We are bullish above the risk management level of 5,565, with a target near 7,850.

Interglobe Aviation has finally moved past its 2019 high after consolidating below the resistance level for nine months.

We are bullish above the level of 1,825 with a target near 2,520.

Seamec has been on a tear, off late, and seems like it's only getting stronger! The price moved past the level of 1,080 effortlessly. Now what's left to see is if we see a follow-through in this breakout.

We are bullish if the price trades above the risk management level of 1,080, with a target near 1,635.

Allcargo Logistics is another name that’s popping right off the charts.

Price has moved past its overhead supply zone near 228 and looks good for the next leg of the race! The indicator is in bullish momentum territory and adds to the existing positive setup.

We are bullish above the level of 228 with a target near 340.

Mahindra Logistics has broken out of a big three-year base. The move in this particular stock is positive only so long as the price manages to stay above the level of 654. Let’s see if this smiley face continues to spread joy.

We are bullish above the level of 654 with a target near 938.

Concor is already halfway to our base breakout target of 873. We are positive above the level of 640 with a target near 873.

Great Eastern Shipping is another stock making some move here. The price rolled over from the resistance of 467 and is currently trading above a crucial level of 350. As long as the price trades above this, the possibility of moving right back up towards 467 remains open. So this is one stock to have on your radar in terms of tracking a move.

Another name to track would be VRL Logistics.

VRL Logistics is currently fighting it out with a long-term overhead supply zone. A breakout above the level of 345 would translate to a three-year base breakout.

Now that’s something that we’d like to get a confirmation on before acting prematurely.

We are only positive if the price moves past 346. The next target to track would then be near 480.

This was a round-up of the Shipping & Logistics sector and the constituents of this sector that look promising.

Do you hold any of these stocks? Do you hold something we haven't covered in this write-up?

Write to us and let us know if you have any questions.

Allstarcharts Team

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