Excel Maritime: A Reversal Appears Imminent

I have been a fan of the dry shippers in general, and Excel Maritime (EXM) in particular, for almost two years. As the Baltic Dry Index of spot prices doubled and doubled again, the dry shippers started to print money, and their shares shot up. Excel Maritime, for example, surged from around 11 when I first bought shares, to over 77 today (unfortunately I did not remain long through the entire rally).

A reversal appears imminent, but has not yet been confirmed. On this particularly ugly day in the markets, dry shippers lost more than most. Excel Maritime lost more than 5%, DryShips (DRYS) lost nearly 9%.

What to watch: The recent spike in most of the dry shippers began shortly after the Baltic Dry Index crossed its 20-day average, and I will consider the trend finished when that average is broken to the downside (see chart below, courtesy of InvestmentTools.com).

On this weakness, I opened a small short position in EXM, which I will close if the Baltic Dry Index or EXM hit new highs.

Disclosure: Short EXM. No position in DRYS, GNK, EGLE.

Comments

[JIM]

You've really provided speculation and mothing useful to back it up. Intellectual Cheeto's!

[wonderific]

What do you think of Diana Shipping? Generates tremendous profit and revenue growth

[wonderific]

Buy Ship Finance They combine drybulk and bulk just had huge stock buy back generate tons of profit and great revenue

[CrossProfit]

Nice short!
50% looks like it may be time to take some off the table!

CrossProfit