Cotton Technical Analysis Summary

 Cotton Technical Analysis Summary

Cotton Technical Analysis Summary.

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Buy Stop: Above 118.44

Stop Loss: Below 113.62

IndicatorSignal
RSINeutral
MACDSell
MA(200)Buy
FractalsBuy
Parabolic SARBuy
Donchian ChannelBuy

Cotton Chart Analysis

Cotton Technical Analysis

The technical analysis of the COTTON price chart in the daily timeframe shows #C-COTTON,Daily is rebounding following retracement from eleven- year high it hit four weeks ago. We believe the bullish momentum will continue after the price breaches above the upper Donchian boundary at 118.44. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below 113.62. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop-loss level (113.62) without reaching the order (118.44) we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Fundamental Analysis of Commodities – Cotton

US exports declined last week amid expectations India cotton crop may be lower and hence negatively impact its cotton exports. Will the COTTON price rebound persist?

There are reports India may significantly reduce her cotton exports. Analysts are concerned adverse weather events and pest damage to India’s cotton plantations, particularly pink bollworm infestations, will result in considerably lower crop than previously expected. India is the fourth biggest cotton exporter in the world. Lower cotton supply expectations are bullish for cotton price. At the same time US Department of Agriculture released its weekly export sales report yesterday which showed export shipments were lower last week while export sales were higher. Thus, exports were down 11 percent from the previous week and 24 percent from the prior 4-week average. AT the same time net sales for 2021/2022 were up 7 percent from the previous week, but down 46 percent from the prior 4-week average. Lower exports are downside risk for cotton price.

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