• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest
• The New Manager

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

Gnanasekar T.

New York cotton futures rallied higher to end at a six-week high due to speculative and option-related buying ahead of a holiday weekend.

Lower supplies in the months ahead, uncertainty over growing conditions in the US and the steady pace of demand should keep prices underpinned.

Markets will also closely track the weather situation.

In other news, speculators have drastically cut their net short positions as per the CFTC data, re-affirming a bullish market ahead for softs.

The active contract moved perfectly in line with our expectations. As mentioned in the previous update, a consolidation between 48-51cents was seen before prices start climbing higher again.

Once the resistance at 52 cents range gets surpassed, also being a trend line resistance point, we can expect cotton futures to regain strength and head towards 55-56 cents range in the coming weeks.

Positive divergence in indicators, clearly suggested a reversal to the up side. As we have been mentioning in the previous updates, 46-47 cents levels will offer good support for a retest of 57-58 cents in the weeks to come.

RSI is in the neutral zone indicating that it is neither overbought nor oversold.

The averages, in MACD are below the zero line indicating bearishness. Only a crossover of the averages above the zero line again will now indicate a bullish reversal.

Therefore, look for cotton futures to consolidate and rise higher.

Supports are at 50.25, 49.25 and 48.75 cents. Resistances are at 51.65, 52.78 and 53.10 cents respectively.

(The author is the Director of Commtrendz Research and also in the advisory panel of Multi Commodity Exchange of India Ltd (MCX). The views expressed in this column are his own and not that of MCX. This analysis is based on the historical price movements and there is risk of loss in trading. He can be reached at gnanasekar_thiagarajan@yahoo.com.)

More Stories on : Technical Analysis | Cotton

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
AP plans low interest loans for farmers

Copyright © 2007, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line