Global stock forecast cut bullish for cotton prices

2018년 4월 12일

US Department of Agriculture revised its world cotton opening stocks downwards by 900,000 bales for April, according to the WASDE report. At the same time the USDA downgraded its forecast for world ending stocks for 2017-18 by 600,000 bales. Lower world inventories are bullish for cotton prices.

On the daily timeframe the Cotton: D1 has been retracing following the decline after hitting four-year high in the beginning of March.


The Donchian channel indicates no trend yet: it is flat.
The MACD indicator is above the signal line and the gap is widening, this is a bullish signal.

We expect the bullish momentum will continue after the price closes above the upper bound of the Donchian channel at 0.8393. A price point above that level can be used as an entry point for a pending order to buy. The stop loss can be placed below the fractal low at 0.7852 After placing the pending order the stop loss is to be moved to the next fractal low. Thus, we are changing the profit/loss ratio to the breakeven point. If the price meets the stop loss level (0.7852) without reaching the order (0.8393), we recommend cancelling the order: the market sustains internal changes which were not taken into account.

Technical Analysis Summary
Position Buy
Buy stop Above 0.8393
Stop loss Below 0.7852