Technical analysis: Will the cotton price advance continue?
|Recommendation for Cotton: Buy
Buy Stop: Above 88.17
Stop Loss: Below 86.29
RSI: Sell
MACD: Buy
Donchian Channel: Buy
MA(200): Buy
Fractals: Buy
Parabolic SAR: Buy
Chart analysis
The #C-COTTON technical analysis of the price chart in 4-hour timeframe shows #C-COTTON, H4 is rising above the 200-period moving average MA(200) which has leveled off. We believe the bullish momentum will continue after the price breaches above the upper Donchian boundary at 88.17. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below 86.29. After placing the pending order the stop loss is to be moved every day to the next fractal low indicator, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop-loss level (86.29) without reaching the order (88.17) we recommend cancelling the order: the market sustains internal changes which were not taken into account.
Fundamental analysis
World cotton consumption was upgraded while ending stock was downgraded on Thursday. Will the cotton price advance continue? The United States Department of Agriculture’s (USDA) June World Agricultural Supply and Demand Estimates report on Thursday projected 2021/22 lower world cotton beginning and ending stocks, production, and higher imports forecast. With world production projected 0.57 million bales lower, consumption projected 1.1 million bales higher and world trade projected 1.1 million bales higher than last month, the world ending stocks are estimated almost 1.7 million bales lower at 89.3 million bales. Higher demand and lower ending stocks are bullish for cotton price.
Want to get more free analytics? Open Demo Account now to get daily news and analytical materials.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.