Global Stock Forecast-Cut Bullish For Cotton Prices
IFC Markets | Apr 12, 2018 07:56AM ET
Cotton prices advance as global cotton stock forecast was lowered. Will cotton continue climbing?
US Department of Agriculture revised its world cotton opening stocks downwards by 900,000 bales for April according to WASDE report. At the same time the USDA downgraded its forecast for world ending stocks for 2017-18 by 600,000 bales. Lower world inventories are bullish for cotton prices.
On the daily time frame the Cotton: D1 has been retracing following the decline after hitting four-year high in the beginning of March.
- The Parabolic indicator has formed a buy signal.
- The Donchian channel indicates an uptrend: it is tilted upward.
- The MACD indicator gives a bullish signal.
- The Stochastic oscillator is in the overbought zone which is bearish.
We expect the bullish momentum will continue after the price closes above the upper bound of the Donchian channel at 83.52. A price point above that level can be used as an entry point for a pending order to buy. The stop loss can be placed below the fractal low at 78.51. After placing the pending order the stop loss is to be moved to the next fractal low following Parabolic signals. Thus, we are changing the profit/loss ratio to the breakeven point. If the price meets the stop loss level (78.51) without reaching the order (83.52), we recommend cancelling the order: the market sustains internal changes which were not taken into account.
Technical Analysis Summary
Position Buy
Buy stop Above 83.52
Stop loss Below 78.51
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.