What We're Reading

This in follow up to my February post pondering if the shipping index had bottomed which was most definitely chucked in to the round file by most as the market has become convinced the industry is dead.  I still beg to differ.

Being a big believer in moving averages, if I see a stock or Index with rising moving averages, I take it as a sign of buying within a name.  That being said, if I see falling longer term moving averages (100d and 200d), that to me signals trouble; stay away or short any pop.  However when I see longer term MA's flattening.......my curiosity is peaked from a bottom fishing point of view.  My first thought "is the bad news over and is it putting in a bottom?

After writing my February post, I put my money where my mouth was and bought $NAT looking for a reversal out of it's bottom (which it did) and today it absolutely plowed through it's 200d where I banked partial. 

Do I believe that it will hold?  No.  With so many shorts it's certain to be faded *and* as most breakouts test their supports, it will as well.  Will I be adding more on that test?  You betcha.  Do I think it'll shoot back up to the highs?  Hell no and I can't believe you would ask that.  This is definitely a short squeeze and it doesn't bother me one bit.  Shippers definitely face a great deal of headwinds as they attempt to pass on higher prices to their customers however if the majority of the new vessels have been received, if they continue to retire old ones shrinking their fleet and if they've re-negotiated the terms of their (heavy) debt given such lower interest rates, I do not see any reason why the bottom is not truly in.  At the very least, the moving averages will become my support as they continue to flatten with my stop below the January low and a partial already banked.  Yes, like going to an AA meeting, my name is Kos, and I like to bottom fish.