Recommendation for Cotton: Buy
Buy Stop։ Above 94.5
Stop Loss։ Below 91.6
| Indicator | Signal |
| RSI | Sell |
| MACD | Buy |
| Donchian Channel | Neutral |
| MA(200) | Buy |
| Fractals | Buy |
| Parabolic SAR | Buy |
| Fibonacci | Buy |
Chart analysis
The #C-COTTON technical analysis of the price chart in the daily timeframe shows #C-COTTON, Daily is rebounding following retracement from seven- and-half year high it hit three weeks ago. The RSI indicator has formed a bearish divergence though. We believe the bullish momentum will continue after the price breaches above the upper Donchian boundary at 94.5. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below 91.6. 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 (91.6) without reaching the order (94.55) we recommend cancelling the order: the market sustains internal changes which were not taken into account.
Fundamental analysis
USDA crop report downgraded domestic cotton crop quality estimates on Tuesday. Will the cotton price rebound persist?
Two days ago US Department of Agriculture released its latest Crop Progress Report indicating quality of the cotton crop nationwide deteriorated. USDA's weekly report showed that 61% of the cotton crop in 15 States that planted 99% of the 2020 cotton acreage nationally is rated good to excellent, down from 70% the previous week. Estimates of lower proportion of higher quality cotton crop translate into expectations of lower supply of the commodity, which is bullish for the #C-COTTON.
Want to get more free analytics? Open Demo Account now to get daily news and analytical materials.
This overview has an informative character and is not financial advice or a recommendation. IFCMarkets. Corp. under any circumstances is not liable for any action taken by someone else after reading this article.
Recommended Content
Editors’ Picks
EUR/USD fluctuates in daily range above 1.0600
EUR/USD struggles to gather directional momentum and continues to fluctuate above 1.0600 on Tuesday. The modest improvement seen in risk mood limits the US Dollar's gains as investors await Fed Chairman Jerome Powell's speech.
GBP/USD stabilizes near 1.2450 ahead of Powell speech
GBP/USD holds steady at around 1.2450 after recovering from the multi-month low it touched near 1.2400 in the European morning. The USD struggles to gather strength after disappointing housing data. Market focus shifts to Fed Chairman Powell's appearance.
Gold retreats to $2,370 as US yields push higher
Gold stages a correction on Tuesday and fluctuates in negative territory near $2,370 following Monday's upsurge. The benchmark 10-year US Treasury bond yield continues to push higher above 4.6% and makes it difficult for XAU/USD to gain traction.
XRP struggles below $0.50 resistance as SEC vs. Ripple lawsuit likely to enter final pretrial conference
XRP is struggling with resistance at $0.50 as Ripple and the US Securities and Exchange Commission (SEC) are gearing up for the final pretrial conference on Tuesday at a New York court.
US outperformance continues
The economic divergence between the US and the rest of the world has become increasingly pronounced. The latest US inflation prints highlight that underlying inflation pressures seemingly remain stickier than in most other parts of the world.