Dry Bulk Freight Rates may rebound

In November last year, I have posted about the reversal in Dry Bulk Freight Rates as reflected by the Baltic Drybulk Index, BDI (go here). Since then, the BDI has dropped about 50% from its peak of 11000 to 5500 (see Chart 1 below). From Chart 2 below, it appears that the BDI has just hooked up & is about the rebound. Whether the rebound can sustain or not, that's the big question. A recovery in BDI is fairly hard to believe, given the gloomy outlook for the global economy, which is expected to be negatively impact by a possible recession in the US.

If Dry Bulk Freight Rates' recovery can sustain, we may see a recovery in the share price of shipping stocks. As such, Maybulk & Hubline may be a good BUY at this moment. From Chart 3 & 4 below, we can see that Maybulk & Hubline have recently tested & rebounded from its medium-term uptrend line.


Chart 1: Baltic Drybulk Rates' weekly chart as at January 31, 2008 (courtesy of Investment.tools.com)



Chart 2: Baltic Drybulk Rates' daily chart as at January 31, 2008 (courtesy of Investment.tools.com)



Chart 3: Maybulk's weekly chart as at January 31, 2008 (courtesy of Quickcharts)


Chart 4: Hubline's weekly chart as at January 31, 2008 (courtesy of Quickcharts)