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Cotton Technical Analysis - Cotton Trading: 2022-05-27
Cotton Technical Analysis Summary
Below 130.07
Sell Stop
Above 138.86
Stop Loss
| Indicator | Signal |
| RSI | Neutral |
| MACD | Sell |
| Donchian Channel | Neutral |
| MA(200) | Buy |
| Fractals | Sell |
| Parabolic SAR | Sell |
Cotton Chart Analysis
Cotton Technical Analysis
The technical analysis of the COTTON price chart in the daily timeframe shows #C-COTTON,Daily is retreating toward the 200-day moving average MA(200) after forming a Head and Shoulder chart pattern. We believe the bearish momentum will continue after the price breaches above the lower Donchian boundary at 130.07. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above 138.86. 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 (138.86) without reaching the order (130.07) we recommend cancelling the order: the market sustains internal changes which were not taken into account.
Fundamental Analysis of Commodities - Cotton
US cotton crop is expected to fall from last year and estimates likely will be downgraded due to unfavorable weather. Will the COTTON price retreat reverse?
The 2022 US cotton crop is currently estimated to be 5.7% lower from last year’s 17.5 million bale crop. And high temperatures in the Southwest with low chances for a planting rain imply diminishing estimates as planting season nears the end. Lower expected US crop estimates are bullish for cotton price. At the same time recent disappointing quarterly reports by tow retail giants Walmart and Target spurred concerns consumer demand slump due to high inflation will continue. Lower demand expectations due to high inflation is a downside risk for price.
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