Technical Analysis #C-COTTON : 2021-02-12

Recommendation for Cotton:Buy

Buy Stop : Above 88.13

Stop Loss : Below 80.67

Indicator Value Signal
RSI Neutral
Donchian Channel Buy
MA(200) Buy
Fractals Buy
Parabolic SAR Buy

Chart Analysis

The #C-COTTON technical analysis of the price chart in daily timeframe shows #C-COTTON,Daily is rising above the 200-day moving average MA(200) which is rising itself. We believe the bullish momentum will continue after the price breaches above the upper Donchian boundary at 88.31. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below 80.67. 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 (80.67) without reaching the order (88.31) we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Fundamental Analysis

World cotton ending stock was downgraded on Tuesday. Will the cotton price advance continue?

The United States Department of Agriculture’s (USDA) February World Agricultural Supply and Demand Estimates report on Tuesday contained 2020/21 higher world cotton production, consumption, and imports forecast. With world production projected 1.3 million bales higher, consumption projected 1.5 million bales higher and world trade projected 350,000 bales higher than last month, the world ending stocks are estimated almost 600,000 bales lower at 95.7 million bales, 3.2 million bales lower than in 2019/20. Higher demand and lower ending stocks are bullish for cotton price.