GE Shipping Weekly Chart
As you can
see in the chart above: GE Shipping bottomed out much before market. It
formed a base and then made a stunning up move for weeks. The rally from
210 to 290 appears quite strong and has come on back of improvement in
sentiment on all shipping stocks globally – thanks to turnaround in
China growth. Just look at the Baltic Dry Index weekly chart – a measure
of shipping rates and how it has broken out in recent past
Shipping
stocks have become investors favorite globally and that might be helping
GE Shipping, but here’s the problem. We don’t know whether this is just
one off rally more like mean reversion move or this turnaround is for
real and long lasting. Remember GE Shipping has not made any real
sustainable move since 2011 and all rallies have terminated at 300. See
the weekly chart below
We don’t know yet. Today GE Shipping was down and closed at 280. On Weekly chart – GE Shipping has started doing Bullish Consolidation i.e. it is not selling off at resistance but has turned sideways and absorbing all the supply. Technically, that’s positive and stocks generally lead to breakout on the upside.
How should one play?
Assume that GE Shipping is not done with the upside and stock still has significant upside left. Also, Assume that since stock made a big 38% move recently – it may do long consolidation i.e. stock may do nothing for weeks before making fresh move. And based on this assumption – one can build long position on declines near 275 with stop loss below 264 and target of 40% up move. The only issue – you may have to wait for weeks before stock makes a move and can be frustrating.ONLY GET INTO THIS STOCK IF YOU HAVE REAL PATIENCE AND IF YOU ARE READY TO WAIT AND GET FRUSTRATED .PATIENCE WILL PAY
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