Technical Analysis #C-COTTON : 2021-06-11

[IFC Markets]

Recommendation for Cotton:Buy​

Buy Stop : Above 88.17

Stop Loss : Below 86.29



RSI : Sell

MACD : Buy

Donchian Channel : Buy

MA(200) : Buy

Fractals : Buy

Parabolic SAR : Buy

Chart Analysis​

The #C-COTTON technical analysis of the price chart in 4-hour timeframe shows #C-COTTON,H4 is rising above the 200-period moving average MA(200) which has leveled off. We believe the bullish momentum will continue after the price breaches above the upper Donchian boundary at 88.17. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below 86.29. 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 (86.29) without reaching the order (88.17) we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Fundamental Analysis​

World cotton consumption was upgraded while ending stock was downgraded on Thursday. Will the cotton price advance continue? The United States Department of Agriculture’s (USDA) June World Agricultural Supply and Demand Estimates report on Thursday projected 2021/22 lower world cotton beginning and ending stocks, production, and higher imports forecast. With world production projected 0.57 million bales lower, consumption projected 1.1 million bales higher and world trade projected 1.1 million bales higher than last month, the world ending stocks are estimated almost 1.7 million bales lower at 89.3 million bales. Higher demand and lower ending stocks are bullish for cotton price.