ZIM Integrated stock price: Technicals point to a 28% upside

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Written on Aug 4, 2023

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ZIM Integrated share price bottomed at $11.75 in July.
Maersk warned that demand for shipping is still deteriorating.
Technicals point to a 28% comeback to $20.

ZIM Integrated (NYSE: ZIM) stock price has bounced back as investors bought the company’s dip. The shares jumped to $15.85 on Thursday, which was higher than the year-to-date low of $11.87.

Maersk warns about shipping

ZIM Integrated share price has done well even as the company downgraded its forward guidance. In a statement two weeks ago, the company said that its adjusted EBITDA will be between $1.2 billion and $1.6 billion this year.

ZIM expects that it will have an adjusted EBIT loss of between $100 million and $500 million. It had previously guided to a positive EBIT of between $100M and $500M. At the time, the company said:

“While our second quarter results are broadly in-line with our expectations, we no longer anticipate an improvement in freight rates in the second half of 2023, consistent with seasonality, as previously assumed.”

The shipping industry is expected to remain under pressure this year as demand continues to weaken. In a statement, AP Moller-Maersk, one of the biggest shipping company said that demand continued weakening. The firm estimates that demand would fall by 1% and 4% this year and then recover in 2024.

Data shows that shipping costs have been under pressure in the past few months. The cost of shipping a container dropped from almost $7,000 in August 2022 to $1,761. Recently, however, shipping costs have jumped to $1,761, up from the year-to-date low of $1,400.

Therefore, investing in ZIM Integrated is a bit difficult at the current levels because of the challenging environment. Most importantly, dividends are not expected to resume any time soon.

ZIM chart by TradingView

The daily chart shows that the ZIM stock price bottomed at $11.75 in July. This was a notable level since it coincided with the lowest level on December 16th. Therefore, as I wrote in this article, the shares have formed a double bottom pattern.

The shares have crossed the 50-day and 100-day moving averages, which is a bullish sign. Further, the Relative Strength Index (RSI) has moved close to the overbought level.

Therefore, the short-term outlook for the stock based on technicals is bullish. If this happens, the next key level to watch will be at $20, which is about 28% above the current level.