Technical Analysis #C-FCATTLE : 2019-11-28

Rising placements bearish for FCATTLE

US cattle placements continued to rise in October. Will the FCATTLE decline?

Recent US feedlot data were bearish. Placements in feedlots during October were higher compared to same period a year ago: 2.477 million head in total, 10% above October 2018, according to the USDA Cattle on Feed Report for October released last Friday. Placements increase accelerated as the Cattle on Feed Report released for September had reported placements in feedlots were higher compared to same period a year ago: 1.884 million head in total, 9% above August 2018. And cattle on feed is now displaying the typical seasonal declines. Higher supply is bearish for FCATTLE.

FCATTLE rises above MA(200)  09/28/2019 Technical Analysis  IFC Markets chart

On the daily timeframe the FCATTLE: D1 has closed above the 200-day moving average MA(200).

  • The Parabolic indicator gives a sell signal.
  • The Donchian channel indicates downtrend: it is narrowing down.
  • The MACD indicator gives a bullish signal: it is below the signal line and the gap is narrowing.
  • The RSI oscillator is near the 50 level.

We believe the bearish momentum will continue after the price breaches below the lower boundary of Donchian channel at 138.19. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the upper Donchian boundary at 145.65. After placing the 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 (145.65) without reaching the order (138.19), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary

OrderSell
Sell stop Below 138.19
Stop loss Above 145.65

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