The Hindu Business Line : Cotton futures may rise higher

Cotton futures ended sharply higher on Friday ahead of the first notice day and robust export sales data. Prices jumped late in Thursday’s pit session and continued higher, before exports were released.

Active March cotton futures contract moved perfectly in line with our expectations. As mentioned earlier, the bigger picture now hints at a test of 84 cents in the coming months. Near-term support is at 73 cents and as long as 68 cents remains undist urbed, we can expect prices to continue rising higher.

Elliot wave counts indicate a third wave impulse in progress. After this correction ends, we can expect the impulse to continue higher. Indicators are displaying a neutral picture. RSI is in the neutral zone indicating that it is neither overbought nor oversold. The averages in MACD are still above the zero line of the indicator indicating bullishness to be intact. Therefore, look for cotton futures to rise higher. Supports are at 73, 70.25 & 68 and resistances are at 76.30, 78.25 & 80 cents respectively.

Gnanasekar T.

(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.)

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