Jim Wyckoff
2 min read
In This Article:
December cotton futures (CTZ25) present a buying opportunity on more price strength.
See on the daily bar chart for December cotton futures that this week’s gains have negated a price downtrend as prices Thursday hit a three-week high. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator has just produced a bullish line crossover signal, whereby the red MACD line has crossed above the blue trigger line.
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Fundamentally, rallying U.S. stock indexes and recent, mostly upbeat U.S. economic data, have been friendly for the cotton market, suggesting better U.S. consumer demand for apparel. Recent economic stimulus measures from China also hint of an improving Chinese economy that will mean more demand for U.S. cotton.
A move in December cotton futures prices above chart resistance at Thursday’s high of 68.76 cents would become a buying opportunity. The upside price objective would be 74.00 cents, or above. Technical support, for which to place a protective sell stop just below, is located at this week’s low of 66.27 cents.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
