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Two Ways to Play: Deutsche Bank Upgrades Dry Bulk Shipping


Strengthen your portfolio in good times and bad.

Deutsche Bank Gives the Nod on Dry Bulk Shipping

Deutsche Bank upgraded select dry bulk shipping stocks this morning. In a research note this morning, the firm upped its target on Genco Shipping (GNK) to $31 from $24 and Eagle Bulk Shipping (EGLE) to Hold with a $4.50 price target.

While Deutsche Bank remains cautious on the sector, it believes near-term fundamentals suggest higher day rates in the fourth quarter.

Vessel dislocation from seasonal coal and grain trades added to positives for the sector as well as strength in imports into China. Capesize rates are up 45% since November 1, but the firm notes that dry bulk shipping stocks are only up 23% due to disbelief of a sustainable recovery. Deutsche believes day rate increases could continue through the first quarter of 2010 or beyond.

From the Bull Pen: Also consider Diana Shipping (DSX). The stock is trading near the top of its Bollinger Bands so one strategy could be to keep the position sizes small with a tight 2% sell stop.

From the Bear Cave: The theme here is that international stocks will outperform US stocks. Bears can look to Gamestop (GME). Those playing the downside can set a buy stop above $24.60.

A Quick Check around the World

Asian trading closed with the Nikkei 0.21%, India 1.09%, Hang Seng 1.73%, Shanghai 2.74%, and Taiwan 1.66%.

Across the pond, we see the FTSE 1.26%, CAC 1.19%, DAX 1.43%

As of 8:30 AM EST, S&P Futures are trading +9.25 to 1100.75. Nasdaq futures are up +10.25 to 1798.50.

A Look at Commodities

Over in commodities, crude oil is +0.94 to 77.29 while gold is +12.00 to 1128.70 this morning. Silver is +0.40 to 1778.00and copper +6.400 to 303.65.

The dollar Index is -0.3550 to 75.0700.

On the Radar


08:30 Retail Sales 0.9% cons.
08:30 Retail Sales ex-auto 0.4% cons.
08:30 Empire Manufacturing 29.0 cons.
10:00 Business Inventories -0.6% cons.

Click here for the full trading radar.

Welcome back, Minyans. Have a great day.
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No positions in stocks mentioned.

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