Thursday, February 19, 2015

NAO Nordic American Offshore Daily Chart

The shipping industry has been taking it on the chin lately. On the dry shipping side, the Baltic Dry Index is at multi-decade lows. NAO is an oil tanker company a fave of notable investor Leon Cooperman at Omega hedge fund. Cooperman lost money last year and is off to a weak start this year. NAO is just one of his picks that crumbled lower causing him sleepless nights.

The chart is attractive. The initial positive divergence bounce occurred in December and that was one heck of a spike higher. Price then comes down and barely matches the low, but its close enough for government work, and to lock in positive divergence across all the indicators (green lines) so a launch is expected, and occurs, but it quickly peters out. It's only a tiny spike three days ago.

The indicators continue to slope higher which is encouraging for price but the last four days are not positive divergence since price did not come down for a matching or lower low as yet. Nonetheless, the set up is encouraging. The weekly chart is positively diverged across all indicators although the RSI is a touch lower. In the daily chart above price is well below the moving averages so a mean reversion is needed (a move higher). Keystone is giving NAO a whirl opening up a new long position yesterday. As always, the trade is highly speculative and dangerous. If it drops, Keystone will look for places to add. Cooperman should finally receive relief from the Nordic beatings.

Look around in the global shipping arena for long opportunities; there is not much of anything attractive on the long side these days except very selective stocks. The coal sector provides another area of opportunity on the long side. Keystone is watching BALT and PRGN, two dry-bulk carriers, looking to enter long, and already has traded in and out of BALT on the long side. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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