Technical Analysis #C-COTTON : 2021-03-10

[IFC Markets]

Recommendation for Cotton:Sell​

Sell Stop : Below 83.05

Stop Loss : Above 93



RSI : Neutral

MACD : Sell

Donchian Channel : Sell

MA(200) : Buy

Fractals : Neutral

Parabolic SAR : Sell

Chart Analysis​

The #C-COTTON technical analysis of the price chart in the daily timeframe shows #C-COTTON,Daily has breached below the support line above the 200-day moving average MA(200) which is rising. We believe the bearish momentum will continue after the price breaches below the Fibonacci 23.6 support level and the lower Donchian boundary at 83.05. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above 93. After placing the pending order the stop loss is to be moved every day to the next fractal high, 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) without reaching the order (83.05) we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Fundamental Analysis​

The United States Department of Agriculture’s (USDA) March World Agricultural Supply and Demand Estimates (WASDE) report on Tuesday showed lower global production and ending stocks compared with last month. Estimated global production is reduced nearly 830,000 bales, largely due to lower Brazilian and US production. World ending stocks in 2020/21 are forecast 1.1 million bales lower than last month, at 94.6 million bales. At the same 2020/21 US cotton forecasts show lower production, consumption, and ending stocks relative to last month. Production is reduced 250,000 bales to 14.7 million, based on the March 9 Cotton Ginnings report. Lower supply estimates are bullish for cotton price. However the current technical setup is bearish.