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.
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