The market experienced a global sell-off, affecting perspectives despite the UPI’s weekly chart basis. The upcoming LNG season is expected to be stronger. This positive long-term sentiment suggests that current declines could be seen as buying opportunities. Additionally, the UPI was rebalanced, incorporating Tsakos Energy Navigation (NASDAQ: TSE) as a new constituent.
UPI & SPX
Last week, UPI, which tracks listed LNG shipping companies, lost 1.52 points or 0.92%, closing at 164.76 points. The S&P 500 index also dropped and lost 2.1%. The chart below shows both indices with weekly data. The decline of SPX and other major indices caused the majority of the decrease in UPI.
Broader view
I wrote this comment on Monday afternoon, after the global sale-off. Although UPI is based on weekly charts, this sale affects my view. But the drop started already last week in techs.
Last week, UPI was pushed down again by wholesale markets. The comparison with SPX shows that the decline of SPX is faster than that of UPIs. For SPX and other major indices, a holiday usually means lower traded volumes and higher volatility. For LNG shippers, summer starts the season after Q2, which is filled with maintenance and drydocks. To make a long story short, whole stock markets may caused drops, but the sentiment of LNG shipping is still positive, despite the short-term drops. Declines should be used for buying.
UPI was rebalanced, and the weight of constituents and some reduction factors were updated. Tsakos Energy Navigation (NASDAQ: TSE) was added as a new constituent.
Constituents
Again, there were more declining stocks than rising ones, and the rises were relatively mild—Korea Line Corporation (KRX: 005880) gained the most, 3.9%, followed by Mitsui O.S.K. Lines (TSE: 9104), which gained 3.2%.
Other gains were 2.3% by Exmar NV (BRX: EXM) and 1.8% by Excelerate Energy (NASDAQ: EE).
On the other hand, the group of decliners was much more comprehensive, and the drops were also much more significant. The most lost was New Fortress Energy (NASDAQ: NFE), which lost not only 15% but also turned back to downtrend mode.
Golar LNG (NASDAQ: GLNG) lost 8.4%, followed by Chevron (NASDAQ: CVX) and Tsakos Energy Navigation (NASDAQ: TEN). CVX lost 5.9%, and TEN declined by 5.1%. Both broke their support areas, but TEN is nearer to the downtrend.
Exceptionally, a large group of declines starts with number three: Kawasaki Kisen Kaisha (TSE: 9107) lost 3.9%, Cool Company (NYSE/OSE: CLCO) lost 3.6%, and Flex LNG (NYSE/OSE: FLNG) and BP (NYSE: BP) lost 3.3%. BP, „K“ Line and FLNG have charts similar to those of Chevron and are close to the last support area before a downtrend. CLCO is still quite far from the previous support.
Capital Product Partners (NASDAQ: CPLP) lost 2.1%, and Awilco LNG (OSE: ALNG) dropped by 2%. Nakilat (QSE: QGTS) lost 1.1%. CPLP is close to the support line, but ALNG and Nakilat are not.
Other declines were smaller than one per cent.
Established in 2020, the UP World LNG Shipping Index is a rules-based stock index family designed to measure the performance of worldwide publicly traded companies involved in the maritime transport of liquefied natural gas (LNG). This unique index covers 18 companies and partnerships worldwide, representing over 65% of the world’s LNG carrier fleet in 2020. The UP Index offers premium services with freemium and trial access to charts.
Source:By Tomas Novotny, UP-Indices.com