DryShips Inc., Eagle Bulk Shipping Inc Join the Bulk Shipping Stock Surge

Shipping stocks DryShips Inc. (DRYS) and Eagle Bulk Shipping Inc (NASDAQ:EGLE) are surging amid a sector-wide rally

Karee Venema
Nov 15, 2016 at 10:27 AM
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Shipping stocks are rising in step with the Baltic Dry Index, amid expectations that booming commodity prices under President-elect Donald Trump will be a boon to the shipping industry. Among shipping stocks trading higher are DryShips Inc. (NASDAQ:DRYS) and Eagle Bulk Shipping Inc (NASDAQ:EGLE), up a respective 45.7% and 11%. And while both DRYS stock and EGLE stock are trading near notable moving averages, the former, at least, could get a bigger boost should short sellers start to capitulate to the upward price action.

Diving deeper, DRYS stock was last seen near $62.43. Although DRYS remains 76% lower year-to-date -- and bottomed at $3.84 on Nov. 3 -- it has surged a jaw-dropping 1,250% in the past week alone. This pop has the shares trading north of their 120-day moving average, a trendline that, until yesterday, DRYS had not closed north of since early May. The stock's next target could be the overhead 180-day moving average -- currently located at $68.23 -- a trendline not conquered on a daily closing basis since June 2014.

As suggested, DryShips Inc. could get an additional boost, should short sellers throw in the towel on their bearish bets. Short interest jumped 18.5% in the most recent reporting period to nearly 113,000 shares -- the most in at least four years. It would take almost four sessions to cover these bearish bets, at DRYS' average pace of trading -- leaving some sideline cash available to help fuel the security's fire.

EGLE, meanwhile, is taking aim at double-digit territory for the first time since late August -- when stock volume exploded -- last seen at $10.20. What's more, the stock earlier topped its 180-day moving average -- a trendline it has not seen the north side of since April 2014. While Eagle Bulk Shipping Inc has jumped more than 141% over the past week, though, it remains a long-term laggard, as well. Specifically, the shares of EGLE are down almost 86% year-to-date -- and hit a record low of $4.06 as recently as Oct. 31.

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