Friday's Wheat-Cattle Outlook
IFC Markets | Mar 07, 2014 08:51AM ET
Good afternoon, dear traders. Today we return to the consideration of the PCI Wheat/F-cattle composite instrument created by GeWorko method. The previous analytical forecast was fully confirmed and investors were able to take profits.
According to the article "PCI based agricultural futures", we concluded that the increase in the feed-wheat proportion within total production will boost the cattle meat production. The wheat price may rise due to its increased use as livestock feed. Thus the meat prices will decline because of more available prey. The fundamental analysis suggests further growth of the PCI Wheat/F-cattle at least until next season.
Here we consider the technical analysis signals on the chart of this composite instrument, available in NetTradeX terminal. The price crossed the daily trendline and the D13 moving average up from below. This is the first sign of a strong upward momentum that will help us to reinvest profitably. The Parabolic SAR continues to widen the gap with prices. That confirms the bearish movement acceleration. There is no contradiction from the RSI (14). At the same time, we note that the indicator signal line reached a local maximum, so the probability of refreshing the price highs at around 1.0975 is high.
By this scenario, we set a potential target according to Fibonacci system and correct it down to the nearest historic lows in the red zone. The calculation level corresponds the level around 1.1273. The stop loss (1.0020) can be moved after the ParabolicSAR above the nearest minimum. However, the most cautious traders can use the support at 0.9871 for limiting the risks to feel safe. We expect the upperBollinger Bands level to cross the calculation target level. We could recommend to place a pending buy order above 1.0975, when the local maximum is fixed at this level. It is likely that this will happen on Monday
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.