• 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 ended marginally lower in thin volumes ahead of a long weekend. The market may derive some leads on its next move with several Government reports going out next week.

The first would be the US Agriculture Department's weekly crop progress report on Monday, the monthly USDA supply/demand report and the USDA's weekly export sales data on Thursday. The trade will also be keeping an eye on growing and weather conditions in the US cotton belt as the spring planting season picks up.

The active May contract is still in a consolidation. Important support is at 52.15 cents, a trend line support point in the short-term. Only a break above crucial resistance at 55-55.46 cents will trigger a sharp rise to 58 cents, followed by the psychological resistance at 60 cents. No change in view.

As seen in the bigger picture chart above, a long period of consolidation will give way a sharp rise higher. As long as 51.30 cents holds any attempts to decline, we see a bullish market ahead for fibre contracts. In the big picture, Elliot wave analysis still points to a corrective pattern in progress and a break above 60.52 cents will give rise to a new impulse.

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.

Current prices are below the short-term average of 8-day EMA at 53.28 cents indicating short-term bearishness and the 34-day EMA is at 53.50 cents. Therefore, look for cotton futures to test the support levels initially and then rise higher again.

Supports are at 52.75, 52.15 and 51.30 cents. Resistances at 53.50, 54.08 and 55.10 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
Fertiliser shortfall likely in kharif season

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