Recommendation for Lean Hog:Buy
Buy Stop : Above 97.13
Stop Loss : Below 93.37
RSI ։ Sell
MACD ։ Buy
Donchian Channel ։ Neutral
MA(200) ։ Buy
Fractals ։ Buy
Parabolic SAR ։ Buy
Chart Analysis
On the 4-hour timeframe #C-LHOG: H4 is rallying above the 200-period moving average MA(200), which is rising itself. We believe the bullish momentum will continue as the price breaches above the upper Donchian boundary at 97.13. A pending order to buy can be placed above that level. The stop loss can be placed below 93.37. After placing the 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 (93.37) without reaching the order (97.13), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.
Fundamental Analysis
Lean hog price is rising supported by expectations of lower Chinese pork supply. Will the LHOG continue gaining? China’s pork deficit due to African Swine Fever (ASF) is driving up Chinese hog prices, according to the Financial Times. Chinese scientist are warning pork supply disruption in the world’s largest consumer of the meat may be much longer as new variants of ASF are spreading more easily than the dominant variety of the pathogen. Piglet prices in China have risen more than 15% since concerns over strains of the virus began to mount in December. Chinese piglet prices have been a good predictor of future wholesale pork prices. And Rabobank downgraded its forecast for growth in China’s pork production to 8 to 10 per cent this year from a previous forecast of 10 to 15 per cent. Expectations of lower Chinese pork supply are bullish for LHOG.