fb#C-LHOG Price Forecast | Rising Chinese pork imports bullish for LHOG | IFCM

Technical Analysis #C-LHOG : 2020-07-15

Recommendation for Lean Hog:

Buy
Strong SellSellNeutralBuyStrong Buy

Above 51.69

Buy Stop

Below 48.93

Stop Loss

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Senior Analytical Expert
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IndicatorValueSignal
RSI Neutral
MACD Sell
Donchian Channel Buy
MA(50) Buy
Fractals Buy
Parabolic SAR Buy

Chart Analysis

IFC Markets Tech Analysis

On the 4-hour timeframe #C-LHOG: H4 is rising above the 50-period moving average MA(50), which has leveled off. We believe the bullish momentum will continue after the price breaches above the upper Donchian boundary at 51.69. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below 48.93. After placing the pending 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 (48.93) without reaching the order (51.69) we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Fundamental Analysis

China’s pork imports have risen after a collapse in domestic pork production caused by an epidemic of African swine fever. Will the lean hog price continue rising?

China’s imports of pork are on the rise. Its January to June imports of pork were at 2.12 million tons in the first six months of the year, up 140% over the same period a year ago, according to China’s General Administration of Customs. China is the second largest pork importing country in the world after Japan, accounting for $4.5 billion (14.1%) of total imported pork in the world in 2019. Rising Chinese pork imports are bullish for LHOG. However China has started testing containers of frozen food for the presence of the coronavirus, and additional testing will negatively affect its meat imports. Likely drop in Chinese pork imports due to testing requirement is a downside risk for LHOG.

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