- Feb 15: DryShips Reports Excellent Number
- Feb 11: Another Constructive Day in Dry Bulk Shippers
- Feb 10: Dry Bulk Shippers - Time to Get Back In?
With the stock pulling back to it's 20 day moving average ($78) I am creating a new position in this name with a relatively large initial buy of 250 shares in the $79s. This is a 1.75% stake.
I already have talked about the fundamentals, but due to the volatility of this name, I have a very simply technical strategy. The 50 day moving average is $76; I want to see DryShips continue to hold that level. If the stock breaks to $75 or so, I will be out with a loss... simple as that. I keep about 10% of my portfolio for more shorter term opportunities, of which I'd place DryShips into that category because I still have some unease about the "very long term". But with the stock down from a high of $88 yesterday and coming off a fabulous earnings report, we take a stake here and see how things pan out. For my personal style this is exactly the type of chart I love. A stock in an uptrend which has pulled back to a key support level. Other people like to buy 52 week highs, but I prefer this sort of set up. I have a clearly defined support level not too far lower, so if this is broken I can exit with a contained loss....Long DryShips in fund and personal account
5 comments:
$75 is also a technical support level coming out of the recent cup n handle. I like the trade though the 50 day MA is close to crossing under the 200.
I use exponential averages so maybe you are using simple averages, but I don't see the 50 and 200 day anywhere close. 50 day at 76 and 200 day at 68. Both have slopes that are quite flattish so I don't see them crossing anytime soon.
There is a news out from the Chinese Ministry Of commerce indicating that there is going to be lower import of Iron Ore. I think that is going to be factor for a short term down pressure.
http://www.marketintelligencecenter.com/articles/541367
Thanks for the link Edward
It says "china is reducing steel exports" - that could mean many things; I found the interpretation interesting.
Depending on how you view it could be
1) they need more steel for themselves so they are taking more off the world market - neutral to iron
2) they are reducing steel in total as their economy slows
So it could go either way; I don't think the answer is so clear cut but if thats what the herd things, its true for today at least
re the dry bulk shippers, they do ship coal and fertilizer last I checked ;) but iron ore does seem to get all the name recognition.
I don't see RIO which is the home of iron ore from Brazil falling off a cliff on this news. I think its posturing since they are still negotiating the price increases for 2008 and China doesn't want to eat 65% increases so they are going to throw out stuff like "well we might not even make that much steel this year, so take that" :)
The information is truly open to interpretation. But the fact that RIO has not fallen does seem to support the idea that lack of demand for Iron Ore might not be the idea.
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