DryShips (DRYS) Stock: Is It Time to Take Profits?

DryShips Inc (NASDAQ: DRYS)

DryShips has been on an incredible ride as of late. The stock has been up and down more than a roller coaster. Nonetheless, most recently, we’ve seen strong upward movement. However, all signs are pointing toward another reversal. Today, we’ll talk about what we’re seeing from the stock, why I believe a reversal is headed our way, and what investors should be watching ahead.

What We’re Seeing From DRYS

As mentioned above, lately, DryShips has been up and down in the market more than a roller coaster. However, most recently, the movement has been upward. That upward movement is continuing today. Since the opening bell rang, the stock has been on a run for the top. At the moment (12:19), DRYS is trading at $5.14 per share after a gain of $0.23 per share or 4.58% thus far today.

Why The Stock Is Up

The truth is that the wild ride on DryShips started weeks ago. After Donald Trump was elected as the President of the United States, the shipping industry went wild. After all, Donald Trump’s plans to restructure global trade agreements will likely lift pricing restraints in the industry if successful. Ultimately, this is great news for the shipping sector as a whole.

Shortly after Trump won the election the Baltic Dry Index, a key index to watch when investing in the shipping sector, climbed dramatically, breaking 1,000 points on the run and climbing far higher. This ultimately built excitement in the shipping sector. However, as the Baltic Dry Index started to go the other way, we saw a bit of a correction. Now, investors are pushing the stock higher and higher in hopes that Trump will do great things for the sector.

However, as mentioned above, it’s my belief that the stock is going to start diving relatively soon. The reason for this is relatively simple. At the end of the day, Trump made a ton of promises, many of which won’t be kept. Banking on those promises is banking on uncertainty, which is never a good idea. However, if we look at the same key data that caused the run in the first place, things look quite a bit different.

Go ahead, take a look at the Baltic Dry Index. As mentioned above, this is a key indicator for the shipping sector as a whole. When you look at it, you’ll see that the index has seen slow, yet steady declines for some time. Now, it’s sitting closer to 900 points than 1,000, and that’s not good news for DRYS or any others in the shipping sector.

What Investors Should Be Watching For Ahead

With regard to the run on DryShips, the best thing that you can watch at the moment is the Baltic Dry Index. While speculation surrounding Trump’s moves, economic conditions, and other factors is causing wild movement at the moment, the data you can bank on is the solid data from the Baltic Dry Index. Given that the index is currently in the midst of consistent downward movement, I can only come to the conclusion that DRYS will soon follow in the downward movement.

What Do You Think?

Where do you think DRYS is headed moving forward? Join the discussion in the comments below!