Technical Analysis #C-LHOG : 2020-02-20


Strong Buy
Strong SellSellNeutralBuyStrong Buy

Above 69

Buy Stop

Below 62.9

Stop Loss

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Senior Analytical Expert
Articles 1463
RSI Neutral
Donchian Channel Buy
MA(200) Sell
Fractals Buy
Parabolic SAR Buy

Chart Analysis

IFC Markets Tech Analysis

On the daily timeframe #C-LHOG: D1 is rising toward the 200-day moving average MA(200), which is falling. We believe the bullish momentum will continue as the price breaches above the upper Donchian boundary at 69. A pending order to buy can be placed above that level. The stop loss can be placed below 62.9. 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 (62.9) without reaching the order (69), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Fundamental Analysis

Lean hog price is rising after decline following signing of interim US-China trade deal. Will the LHOG continue rising?

The US-China Phase 1 trade agreement went into effect last week as was stipulated - 30 days after signing the deal on January 15. Under the deal, China agreed to buy $32 billion in additional imports of US farm products, including soybeans and pork. Pork prices in China last week neared a record set in 2019 after measures to stop the coronavirus epidemic disrupted the transportation of pigs and the restart of slaughtering plants. Lean hog price has reversed the downtrend which continued after the signing of the phase one US-China trade deal. These are bullish for LHOG. However, U.S Department of Agriculture reported pork shipments to China totaled 13,000 tons in the week ended February 6, down from 16,200 tons shipped a week earlier. Slow shipments to China are a downside risk for LHOG.

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