Star Bulk Carriers Corp., a shipping company, engages in the ocean transportation of dry bulk cargoes worldwide. Its vessels transport a range of major bulks, including iron ores, coal, and grains, as well as minor bulks, such as bauxite, fertilizers, and steel products.
Take a look at the 1-year chart of Star (NASDAQ: SBLK) below with my added notations:
Over the past3 months, SBLK has formed an $11.5 resistance (red), while also starting a trend line of support (green). Together, these two lines have formed an ascending triangle on SBLK. Eventually, the stock will have to break either the $11.5 resistance or the triangle support.
The Tale of the Tape: SBLK is winding up between two key levels. A long trade could be made at the trendline support or on a break above $11.5. A break below the trendline would be an opportunity to enter a short trade.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT