Financial Daily from THE HINDU group of publications
Monday, Dec 02, 2002
Financial Daily from THE HINDU group of publications Monday, Dec 02, 2002 |
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Agri-Biz & Commodities
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Cotton Columns - Technical Analysis Cotton prices seen moving up Gnanasekar T.
NYCE cotton futures closed mostly firmer on Wednesday in lifeless dealings as squared their positions early for the Thanksgiving holiday weekend. Earlier Wednesday, the US Census Bureau released its monthly report on American cotton consumption. The National Cotton Council (NCC) of America said, US annualized cotton consumption was pegged at 7.33 million (480-lb) bales, compared with the USDA projection of 7.7 million bales and trade belief it would range from 7.2 million to 7.5 million bales. With the recent economic data on the US consumer confidence showing brighter prospects, consumption levels could show signs of increase. USDA, in its weekly report, said net upland cotton sales hit 175,300 running bales, slightly above trade expectations. It also forecast US cotton exports in 2002/03 marketing year (July/August) at 10.8 million (480-lb) bales, from 11 million last month. However, prices may need to decline in the coming weeks for sales to spike higher. The active December is in a sideways direction, undecided on the possible course from here. Good support is noticed at 46.86c. The important resistance level at 50.10c needs to be decisively broken to provide strength to the bullish move from here. A double top pattern is noticed now and there is potential for prices to correct lower to 46c on the down side. Prices should hold well at this level for sometime. Elliot wave counts are showing a corrective pattern in the medium term in progress again. A break of 45c on the downside will signal the end of the corrective `C' wave in the bigger picture targeting lower levels from here. RSI is in the neutral zone now indicating that it is neither overbought nor oversold. The averages in MACD, are comfortably above the zero line in the indicator. As long as it stays above the zero line prices will continue their bullish streak. Current prices are below the short-term average of 9 day EMA showing weakness in the short term and the medium term average 50 day EMA is at 46.45c. Look for prices to test the support levels. Resistances at 48.30, 49.20 & 50.10c. Supports at 47.15, 46.35 & 45.60c.
(The views expressed by the author are his own and not necessarily of his employer Scotiabank. This analysis is based on the historical prices movements and there is risk of loss in trading.)
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