Registered User
Joined: 12/21/2004
Posts: 902
|
For whatever reason, the shipping sector has come roaring back alive this week and is featuring several hot stocks that are currently moving.
Check out - these six stocks were all on today's IBD "Stocks on the Move" list (it's rare to see so many stocks from one sector on this list):
DSX
EXM
DRYS
ONAV
SSW
HRZ
And of course, my favorite in which I've had a postiion since April, HOS, didn't make the IBD list, but it made a convincing 52 week high today.
4 Stocks from this sector, TBSI, DRYS, NM and EXM are also in the Barchart Top 100, with TBSI ranked #3 and DRYS at #5.
Something is going on in this industry right now - with many good stocks to choose from, attracting a lot of up volume. The rising tide is evidently lifting all boats.
The rising
|
|
Registered User
Joined: 9/21/2005
Posts: 566
|
no doubt about the strength of the sector. You have to wonder why though. It's almost like the all the fund managers got together to buy the sector. I mean shipping isn't like internet or biotech. But, then again, if agricultural chemicals and machinery can take off, why not shipping?
I have to look for a way to find these sectors when they first emerge from their hybernation.
|
|
Registered User
Joined: 12/21/2004
Posts: 902
|
QUOTE (jcfla7) no doubt about the strength of the sector. You have to wonder why though. It's almost like the all the fund managers got together to buy the sector. I mean shipping isn't like internet or biotech. But, then again, if agricultural chemicals and machinery can take off, why not shipping?
The answer is simple, JC - CHINA. The growth of the Chinese economy has created an incredible demand for raw materials of every kind and the Chinese have been importing huge quantities from South America and Africa. They interviewed a guy on CNBC the other morning who's the CEO of a bulk carrier fleet running product from Brazil to China around the Horn. He said the bulkers make the return trip completely empty (i.e., only one leg of the trip is profitable), yet they are making huge profits.
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
"The answer is simple, JC - CHINA."
--------------------------------
and I thought it was all the
Harry Potter books.
Thanks
diceman
|
|
Registered User
Joined: 9/21/2005
Posts: 566
|
Makes sense about China. It reminds of me Jim Baker and his ability to spot these emerging mega-trends before they became common knowledge, and, more importantly, profit from them by picking the right sectors. I know I don't have that gift, but there should be a means to spot sectors 'in play' as they begin a run. You dont have to be first as long as you are early. This seems to hold true for ag chem, machinery, mining, and now shipping. So what is the best way to catch a stock in an early stage of its run?
As for Potter, I have never read any of his books or attended his shows so can't comment authoritatively on his investment style or track record. I tend to be suspicious though of these young English upstarts though who think investing is some kind of trick or a game in which they can leave the rest of us spellbound with a lot of smoke and mirrors.
|
|
Registered User
Joined: 12/21/2004
Posts: 902
|
QUOTE (jcfla7) Makes sense about China. It reminds of me Jim Baker and his ability to spot these emerging mega-trends before they became common knowledge, and, more importantly, profit from them by picking the right sectors. I know I don't have that gift, but there should be a means to spot sectors 'in play' as they begin a run. You dont have to be first as long as you are early. This seems to hold true for ag chem, machinery, mining, and now shipping. So what is the best way to catch a stock in an early stage of its run?
As for Potter, I have never read any of his books or attended his shows so can't comment authoritatively on his investment style or track record. I tend to be suspicious though of these young English upstarts though who think investing is some kind of trick or a game in which they can leave the rest of us spellbound with a lot of smoke and mirrors.
|
|
Registered User
Joined: 12/21/2004
Posts: 902
|
Bleah - I've had more posts screw up on me lately...
QUOTE (jcfla7) but there should be a means to spot sectors 'in play' as they begin a run. You dont have to be first as long as you are early. This seems to hold true for ag chem, machinery, mining, and now shipping. So what is the best way to catch a stock in an early stage of its run?
I guess I disagree - I've had great success and have made plenty of money jumping on already established trends - it's my whole style. Just because something isn't at the beginning doesn't mean that it is over - Ag Chem has been hot since at least January (and somewhat before, but that's when it came to my attention), yet I got a quick 25% return on a KMBG trade last month - I had already identified that industry as "hot", and so jumped on as soon as I saw a stock in that industry taking off. The fact that I had made money on stocks in that industry in Jan-Feb and in Mar-Apr didn't cause me to disregard it just because it wasn't in an early stage of it's run - as long as the industry itself was still strong, it didn't matter to me that it wasn't "early". I think that's one of the reasons why I find MACD-H analysis so appealling - it identifies what is strong, and what is likely to remain strong.
Have you read the COPPER thread yet? There are true opportunities in that sector right now - yet it's been on a run since 2003. Because it's not "early" does that mean that those potential trades should be disregarded?
To my thinking, I think it's more important to my trading style to determine the end of a run, rather than the start.
|
|
Registered User
Joined: 9/21/2005
Posts: 566
|
Fair points. I get gun shy if I see a stock that is significantly extended, though I would concede that these are often the stocks that can continue to climb as has been true with ag chem. However, with other stocks like crox maybe not so profitable.
Would you still be in CMED? What do you think of price action to date?
Also, take a look at tonight's Worden report. I wonder if RSMA can be combined with MACDH as a form of sector trading? The report tonight is interesting because it talks about a screen for identifying strong sectors. Seems a bit like IBD?
However, it does not spell out the selling strategy. Maybe this is explained in the other posts on RSMA. If you dont have a selling strategy you only have half a system in my view.
|
|
Registered User
Joined: 12/21/2004
Posts: 902
|
QUOTE (jcfla7) Fair points. I get gun shy if I see a stock that is significantly extended, though I would concede that these are often the stocks that can continue to climb as has been true with ag chem. However, with other stocks like crox maybe not so profitable.
Would you still be in CMED? What do you think of price action to date?
Also, take a look at tonight's Worden report. I wonder if RSMA can be combined with MACDH as a form of sector trading? The report tonight is interesting because it talks about a screen for identifying strong sectors. Seems a bit like IBD?
However, it does not spell out the selling strategy. Maybe this is explained in the other posts on RSMA. If you dont have a selling strategy you only have half a system in my view.
|
|
Registered User
Joined: 12/21/2004
Posts: 902
|
QUOTE (jcfla7) Fair points. I get gun shy if I see a stock that is significantly extended, though I would concede that these are often the stocks that can continue to climb as has been true with ag chem. However, with other stocks like crox maybe not so profitable.
but that's the beauty of MACD-H=100. If you had bought CROX at the open the day after it made MACD-H=100 on May 8 - after it was already up over 50% since Jan 1, you could still have made over 30%. Of course even though CROX continued to go high and is still high, the low MACD-H tells you not to enter now. The trick is to buy stocks that have the high MACD-H to match the trend. Unless 30% is too paltry to you - but that's the kind of return I'm very happy with. LOL
QUOTE (jcfla7) Would you still be in CMED? What do you think of price action to date?
Yes I would still be in CMED - it still hasn't retested the weekly MACD-H=100 high - in fact it still is at MACD-H=100 on the weekly and no support lines have been violated, and down vol is still much less than up volume. I would hold on to it to see if it retests the weekly high - unless I loss my patience waiting (the weekly takes longer), and need to open that spot in my portfolio for something else.
QUOTE (jcfla7) Also, take a look at tonight's Worden report. I wonder if RSMA can be combined with MACDH as a form of sector trading? The report tonight is interesting because it talks about a screen for identifying strong sectors. Seems a bit like IBD?
However, it does not spell out the selling strategy. Maybe this is explained in the other posts on RSMA. If you dont have a selling strategy you only have half a system in my view
I'd like to read about it some more and play around with it some before I form an opinion. Why don't you play around with it some and see if it can be used with MACD-H and we'll compare notes.
I was thinking about the uses of MACD-H with industry groups. How about, in various time periods, identifying industry groups with high MACD-Hs and then doing MACD-H sorts on the individual stocks in those industries to find likely candidates. I use a constant zoom=6 to keep my HNC/Diceman candidates consistent (the criteria is multi-month highs, and I've arbitrarily picked 3 months to meet that condition), but I would imagine playing around with the zoom and identifying MACD-H=100 in both short time periods and longer time periods might come up with some interesting results as far as looking for stocks/industries that are "taking off". It might be something fruitful to play around with.
|
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
"However, it does not spell out the selling strategy."
------------------------------------------------------------------
I'm not certain of this but I think the sell signal is when
the short-term moving average (of RS) goes below
the long-term.
(The stocks run of out performing the SP-500 is over)
I believe the average lengths were 10 and 40.
(but again that is from memory)
-----------------------------------------------------------------
I have found in my trading the usability of strong
sectors averages about 144 trading days.
(about 7 months)
Thanks
diceman
|
|
Registered User
Joined: 9/21/2005
Posts: 566
|
Hohandy, how have the shipping stocks faired in recent market volatility?
|
|
Registered User
Joined: 12/21/2004
Posts: 902
|
JC - as a sector, not so good - ranked near the bottom (206 of 239) of Hemscott Industry Groups since 7/20.
However, one of my positions, TBSI (#1 on Barchart Top 100) is up over 20% since my entry on July 31
|
|
Registered User
Joined: 1/2/2005
Posts: 21
|
GNK nice chart.
|
|
Registered User
Joined: 12/21/2004
Posts: 902
|
yes it is Kell - and if you've been following the HNC/Diceman/MACDH100, it's at the decision point today, at 9.4% of it's MACD-H100 high
There were a bunch of MACD-Hs in this group in July followed by a pullback, so this might be a good entry opportunity for stocks in this sector.
|
|
Registered User
Joined: 12/21/2004
Posts: 902
|
A little tidbit in today's news:
Dry Bulk Hits Hit New High
Spot rates for dry bulk shippers rose to another new high, as the Baltic Dry Index closed at 7143, up 77 points. The index, managed by the Baltic Exchange in London, covers rates for vessels carrying dry bulk cargoes such as iron ore, coal and grain. It measures rates on 40 shipping routes on a time charter and voyage basis.
Rates have risen sharply in the past year as ships travel longer routes -- in particular to China -- and port congestion increases, delaying offloading of ships for three to four weeks in some cases
|
|
 Gold Customer
Joined: 11/11/2006
Posts: 359
|
Shipping is #3 in BarCharts Sector Lists, by Alpha Weighting.
Agriculture Chemicals is #1.
Mammon
|
|
Registered User
Joined: 12/21/2004
Posts: 902
|
Mammom - 2 of the top 3 in the Barchart Top 100 are also shipping (DRYS - #3 is a bulk carrier - this little news that I posted from today is an illustration of why it is ranked as high as it is). However, always remember that the Alpha value in Barchart is based upon a 6 month formula, so some high alpha value stocks and industries may be skating from being hot back in April.
When I look at the Barchart sectors list, I generally go with the 1 month change list to see what's currently hot. And as of right now every single industry on that list is in the red based on this past month. And notice that Shipping and Ag Chem don't show near the top of that list. But I also think that shipping is one of those industries where the stocks are currently down and not reflecting the strength in the industry. Bulk shippiog is at new highs, and with petroleum near all-time highs and the hurricane season underway, there's no reason why the oil tankers shouldn't be making money hand over fist. It's one of those global industries where the stocks should come roaring back at some point, and that should still remain very profitable despite the US mortgage/credit crunch and the possibility of us tipping into recession.
|
|
Registered User
Joined: 12/21/2004
Posts: 902
|
Shares of Drybulk Shippers Soar As Analyst Touts Sector's Strength and Key Index Hits High
NEW YORK  -- Shares of drybulk shippers soared Monday as spot charter rates for the vessels hit yet another all-time high, and a Jefferies & Co. analyst said he sees the market remaining robust at least through 2008.
Analyst Douglas J. Mavrinac said he continues to see drybulk charter rates hitting all-time highs through the end of the year. Mavrinac reiterated his "Buy" rating on Diana Shipping Inc., citing the Greek carrier's increased "financial flexibility" following a 10 million share public offering on Friday, with proceeds estimated at about $250 million.
The company also has an "attractive mix" of long-term time charter contracts, Mavrinac said, and strong exposure to the spot market, where rates continue to soar.
The Baltic Dry Index, which covers drybulk shipping rates and is managed by the Baltic Exchange in London, jumped 126 points Monday to close at an all-time high of 9082, after setting consecutive all-time highs both Thursday and Friday.
The index measures rates on 40 shipping routes on a time charter and voyage basis.
etc.
***********
As long as demand for commodities holds, and the Chinese continue to build before the Olympic games, the demand in the shipping sector should stay strong, regardless of what happens in the US economy.
4 in the top 8 of Barchart Top 100 (including #1) are shipping companies and Shipping is #3 of 175 industries in measured in YTD change of Barchart's "Alpha" value.
Shipping has 3 stocks in today's IBD "Stock on the Move" list, 3, stocks in the top 21 of IBD's TOP 100 list, and currently ranks 16 out of 197 industries on IBD's Industry Group Rankings.
On Friday the Shipping group cracked Memorableproduct's daily "Today's Industry Leader" list, debuting at #16. Let's see where it is today.
|
|
Registered User
Joined: 3/21/2006
Posts: 4,308
|
EXM
DRYS
GNK
QMAR
GLNG
These five look good to me..
|
|
Registered User
Joined: 12/21/2004
Posts: 902
|
Also,
DSX has very strong moves in July and August, and looks to be making be making one again now
For non-shipping sector companies taking advantage of strength in shipping, also consider SEA (which is a financing utility that specializes in shipping) and ANW which supplies fuel and services to shipping fleets.
|
|
|
Guest-1 |