Financial Daily from THE HINDU group of publications
Monday, Jan 28, 2002
Financial Daily from THE HINDU group of publications Monday, Jan 28, 2002 |
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Agri-Biz & Commodities
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Cotton Columns - Technical Analysis Cotton futures to move up Gnanasekar T.
Cotton futures at the New York cotton exchange closed marginally higher aided by good export figures on Friday. After four consecutive sessions of losses, prices settled with moderate gains on Friday helped by renewed evidence of buying interest overseas and better expectations of domestic consumption. Cotton felt the pressure right from the beginning of the week with all round selling both from funds and the trade on speculation of poor domestic consumption report and the export figures. However, the US Department of Agriculture said upland exports sales totalled 99,000 bales, down 26 per cent from the week earlier. Shipments meanwhile totalled 232,100 bales, a marketing year high and 1 per cent above the previous week. And the National cotton council reported that mill consumption in December stood at 7.5 million bales compared with previous month's 7.37 million bales. The shipment figures are on target to meet the figure of 9.8 million bales estimated earlier by USDA. Meanwhile, the Cotlook A index was 0.15 cents lower at 43.50 cents per pound Friday. March contract is still stuck in the channel neither able to break the support downwards nor the resistance at the top. It is also close to forming a double top pattern in the charts, which could lead to a minor fall in prices in the short term. However, good support is expected at 35.85c on the downside and the 34c level should provide further support failing which we could see a test of 32c. The structures as per elliot wave analysis haven't changed much as we are in a correction phase in the longer picture. A break of the 34c level down could however alter the Elliot wave structures. RSI continues to be in the neutral zone indicating that it is neither overbought nor oversold. The averages in MACD are close to the zero line in the indicator and a crossover below the line will have bearish implications. Current prices are now testing the short-term 9 day EMA and the 50 day EMA is now at 36.70. Look for the prices to head higher after a test of the support levels. Important support levels are at, 36.00,35.35 & 34.80. Resistances, at, 37.60,38.10 & 38.50 cents.
(The author is a Chennai-based technical analyst who tracks the international commodities futures markets. This analysis is based on historical price movement of the commodity concerned. There is risk of loss in trading.)
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