That was a 17.5% drop, or a whopping $22.97, to close at $108. But even the other stars were not spared, as Excel Maritime closed down $16 to $63.91, and Diana Shipping suffered $5.63 to $39.19.....Ouch! So what was the culprit. It was actually two issues. The first was an article by the the Financial newsletter Motley Fool questioning the profitability of Dryships in an article entitled "World's Scariest Stocks: Dryships" on Monday (Oct 29th) and the fact that freight rates dropped unexpectedly. Here's what Forbes said,"Freight rates on cape size ships, which are the largest vessels, dropped unexpectedly on Tuesday, which some analysts say may be a sign that Chinese steel production has leveled off, causing shipping prices to decrease as less vessels are needed. Others said that Chinese steel producers are downplaying the demand for steel by holding off on chartering ships in order to rattle the shipping industry since a decrease in demand for steel would mean a drop in shipping prices."
Let's see whether the stock stablises in the next couple of days. Trying to catch a bottom on bearish engulfing pattern is akin to catching a falling knife. Btw, since the stock was never at its RSI-2 level, you should not have a position in Dryships. Follow the rules.....
Chief Shook
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