Shipping Stocks Dive As Stagflation Fears Hit Market; Zim Triggers This Sell Rule

Shipping stocks were under pressure Wednesday as global stagflation worries appeared to hit the industry.


On Wednesday, the Organization for Economic Cooperation and Development cut its global growth estimates to 3% in 2022, down from its 4.5% estimate. The OECD noted the invasion of Ukraine and China’s Covid-19 shutdown as key factors.

On Tuesday, the World Bank slashed its 2022 GDP forecast from 4.1% to 2.9%. Also Tuesday, Treasury Secretary Janet Yellen said the U.S. economy is likely facing a prolonged period of high inflation.

Some of the groups stocks may be falling on news that Russia-Turkey talks ended without a significant breakthrough toward creating a pathway to export grain from Ukraine across the Black Sea.

Today, the shipping industry group tumbled more than 8%. Its sell-off marked a bearish day for an industry group that had climbed to No. 10 out of 197 groups and included a few of those companies in the IBD 50.

Golden Ocean (GOGL) slid 7.7%. Matson (MATX) tumbled 11.7%. Star Bulk Carriers (SBLK) dropped 10.7%. And Zim Integrated Shipping (ZIM) dived 14.7%. All four shipping stock saw big volume, indicating institutional selling.

Zim Shipping Triggers Sell Rule

Israel-based container-freight operator Zim Shipping lost 14.7% Wednesday in heavy turnover. Earlier this week, Zim shares broke out past a 68.80 buy point in a cup with handle, according to IBD MarketSmith chart analysis. But that breakout has now failed, with the stock down more than 7% below the correct buy point.

Amid the sell signal, the stock slid below its key 50-day moving average, which is another sign of weakness. If Zim stock is able to regain its 50-day benchmark, then another handle entry could eventually come into play.

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Other Shipping Stocks Dive

Golden Ocean skidded nearly 8%, trading at its lowest level since mid-May. Shares remain above their 50-day line, so they aren’t in imminent danger of a sell signal. Still, Wednesday’s action is worth monitoring. Shares did fall below the 21-day exponential moving average.

Matson stumbled nearly 12% Wednesday. Shares are breaking down below their long-term 200-day line. Matson had already triggered a sell signal on April 4 when it plunged through its 50-day moving average. Shares are more than 30% off their 52-week high.

Star Bulk Carriers slid around 10.7% in big volume, falling below the 50-day line. Following the stock’s weak close, it appears that more weakness is likely. Shares are about 30% above a 21.73 cup-with-handle entry, so investors with that type of profit cushion could decide to wait until the end of the week before making a decision.

Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on IPO stocks and the stock market.


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