$ZIM Long Entry for Q3
My last ZIM post in Jan is currently up 100% from $10 and currently sitting at $21 so why post a new entry? Because of ZIM ZEX zim.com/landing-pages/zex-is-back
ZIM had a bad Q2 but covered enough ground to bring back the dividend, which only adds to this long-term position but if you missed that is why I am posting.
The freight market has changed over the last 3 weeks from shippers looking for the cheapest possible rate to not being able to find capacity at 200% higher rates. With that said the carriers all announced premium rates, which I could go on and on about but in short premium rates are an offer of some level for guaranteed service at a rate much higher than the current market rate. (MSC Diamond tier service, ZIM ZEX, YML premium, etc.) The reason this is so important is the carriers are governed by the FMC to announce increases to rates 30 days in advance through "GRI" or "PSS" increases... these premium service offerings circumvent the FMC as they are only used by someone who "wants" aka needs to get their freight. Long story long.. the carriers are about to see covid style profits using the same game plan they implemented in 2021/2022 where ZIM saw a high of $90+
I am not saying it will go that high again but what I can say is that the market has shifted and for the time being the trend is supporting shippers needing to use the premiums, which are 100% higher than the market rate and the market rate is 200% higher than where it was when ZIM was 10/share.
As always in my posts here I try to cover the tenets of my strategy so here is what I am thinking on all points.
Price: The price has already ran up over 100% in the last quarter so it is definitely over-extended and likely due for a pullback but as you can see from 2021-2022 it can go extended for a long time before pulling back. That said, any dips are for me buying and will be adding to my position until the market changes.
Timeline: I will post here if the market shifts but I think ZIM sees a huge Q3 and probably Q4 but will be watching for liquidity issues and election sway for exiting this one.
Indicators: As I mentioned the price is up almost 200% from the low in Q4-2023 so the daily is over-extended on MACD and RSI but weekly and monthly look great so HTF it could just keep going. The responsible thing to do is look for a dip to key level ($15, $20, etc) but I will continue to layer into the position until something changes in the industry.
Macro: Liquidity strains due to tax season are over and
- Treasury buybacks
- QT taper
- Powell dovish AF
- Domestic liquidity tax drag mostly over
- Global liquidity looking positive BOJ/PBOC/ECB/etc.
Other trades: as freight rates rise, carrier profitability rises, and is a leading indicator for US domestic trucking which has been in a recession for 12 + months. There will be value in strong trucking stocks for Q3 and Q4 and when we exit ZIM it will be a sign to get ready to exit those. Will post any good ones I find here.
ZIM had a bad Q2 but covered enough ground to bring back the dividend, which only adds to this long-term position but if you missed that is why I am posting.
The freight market has changed over the last 3 weeks from shippers looking for the cheapest possible rate to not being able to find capacity at 200% higher rates. With that said the carriers all announced premium rates, which I could go on and on about but in short premium rates are an offer of some level for guaranteed service at a rate much higher than the current market rate. (MSC Diamond tier service, ZIM ZEX, YML premium, etc.) The reason this is so important is the carriers are governed by the FMC to announce increases to rates 30 days in advance through "GRI" or "PSS" increases... these premium service offerings circumvent the FMC as they are only used by someone who "wants" aka needs to get their freight. Long story long.. the carriers are about to see covid style profits using the same game plan they implemented in 2021/2022 where ZIM saw a high of $90+
I am not saying it will go that high again but what I can say is that the market has shifted and for the time being the trend is supporting shippers needing to use the premiums, which are 100% higher than the market rate and the market rate is 200% higher than where it was when ZIM was 10/share.
As always in my posts here I try to cover the tenets of my strategy so here is what I am thinking on all points.
Price: The price has already ran up over 100% in the last quarter so it is definitely over-extended and likely due for a pullback but as you can see from 2021-2022 it can go extended for a long time before pulling back. That said, any dips are for me buying and will be adding to my position until the market changes.
Timeline: I will post here if the market shifts but I think ZIM sees a huge Q3 and probably Q4 but will be watching for liquidity issues and election sway for exiting this one.
Indicators: As I mentioned the price is up almost 200% from the low in Q4-2023 so the daily is over-extended on MACD and RSI but weekly and monthly look great so HTF it could just keep going. The responsible thing to do is look for a dip to key level ($15, $20, etc) but I will continue to layer into the position until something changes in the industry.
Macro: Liquidity strains due to tax season are over and
- Treasury buybacks
- QT taper
- Powell dovish AF
- Domestic liquidity tax drag mostly over
- Global liquidity looking positive BOJ/PBOC/ECB/etc.
Other trades: as freight rates rise, carrier profitability rises, and is a leading indicator for US domestic trucking which has been in a recession for 12 + months. There will be value in strong trucking stocks for Q3 and Q4 and when we exit ZIM it will be a sign to get ready to exit those. Will post any good ones I find here.
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