Excel Maritime Carriers took the plunge

With EXM recently on the radar for successful trading signals and DRYS doing nothing to excite a long position, todays trading action in EXM could be exactly what DRYS needs. The chart was exciting to see develop and if it holds true for any substantial length of time EXM could be on its way to much higher prices.

On a technical basis it has been difficult to follow the short term picture as it changed in some meaningful ways after the May 6, 2010 drop. Many short term indicators were near reversals, and then because of the spike subsequently not so near. Specifically within the MACD readings. When the divergence of the final corrective wave of a MACD reading is violated a lower low in price is inevitable.

If you take a look at the price chart of EXM today, you’ll notice that it took out its May 6 low price and closed higher on the day. This should be positive and a close sell stop with support at the 5.20 level should be used to trade to the long side. So far EXM has completed its correction if it stays above this level and should move higher. If it goes lower than this then that short term theory is out.

Watch how the price motion corrects this move using the low of today. Wait for a possible correction to retracement levels from this low to the next significant high made. If this is the beginning of a wave 1 they can often correct 62% or more. If today’s high were to correct look for support at 5.35 for the low end of correction. There isn’t much more room to fall between the low of today and the 5.20-5.13 support if EXM is going to continue its latest uptrend. This could give an active trader a good opportunity to get in at a turning point price and also out at a price that wont cost you if things go wrong.

Watching the price action of EXM today should have made any holders of DRYS jealous. Why DRYS didn’t crack it’s May 6, 2010 low as well is not known, but it is likely what will need to happen before the sluggish downtrend reverses.

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