Seanergy Maritime (SHIP) Stock Follows Shipping Rates For The Top

Seanergy Maritime Holdings SHIP Stock News

Seanergy Maritime Holdings Corp. (NASDAQ: SHIP) is having a strong day in the market, following up on the strong gains that we saw from the stock yesterday. However, the company hasn’t issued any SEC filings or press releases. So, what’s the deal? Here’s why it’s climbing:

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SHIP Stock Benefits From Increasing Shipping Rates

At the moment, Seanergy Maritime Holdings is one of multiple companies that are benefiting from increasing shipping rates. According to a recent report, the Baltic Exchange’s main sea freight index continues to inch higher.

The growth in the index has to do with growth in demand for panamax and supermax vessels. In fact, due to the strong growth in these areas, the Baltic dry index has climbed to 1,558 points, the highest level it’s seen this year.

Moreover, on Friday, the index posted its biggest weekly gain ever. This was driven by a rebound in global commodies trading and a pick up in demand for Chinese iron ore.

The News Seems To Have Triggered A Short Squeeze

The news that shipping rates are going up is great news for SHIP and its investors. Obviously, this caused the stock to tick up. However, the movement caused by the news that rates continue to head up seems to have triggered a short squeeze.

Unfortunately, due to questionable fund raising tactics often seen from companies like SHIP, the dry bulk shipping industry is one that’s met with heavy short interest. As the stock started to head up, shorts started racing to cover their positions, leading to tremendous gains that are continuing today in what seems to be a short squeeze.

Seanergy stock isn’t the only one. Various stocks across the dry bulk sector seem to be in the midst of a short squeeze. So, the sector is one to watch closely at the moment.

Will The Gains Continue

If you follow SHIP or any other stock in the dry bulk industry, you know that this is an industry riddled with volatility, making it great for trading but painful for investors. We may continue to see movement out of this short squeeze, not just in this stock and others.

However, if you look at the long-term history of this stock and many others in the space, you’ll see a more than 99% decline since 2008. All in all, if you’re looking for long run gains, I’d be very careful here. However, if you’re looking for a few quick trades, SHIP stock is one to pay attention to.

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