COTTON closes lower for the 2nd day in a row
Cotton (COTTON) Technical Analysis Report for Feb 14, 2020 | by Techniquant Editorial Team
Moving lower for the 2nd day in a row, COTTON finished the week unchanged at 68.41 after losing $0.22 (-0.32%) today. Trading $0.34 higher after the open, the contract was unable to hold its gains as the bears took control ending the day below its opening price. Closing below Thursday's low at 68.51, the market confirmed its breakout through the previous session low after trading up to $0.43 below it intraday.
Daily Candlestick Chart (COTTON as at Feb 14, 2020):
Friday's trading range has been $0.82 (1.2%), that's below the last trading month's daily average range of $1.28. Weekly volatility is also lower, being way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for COTTON.
Three candlestick patterns are matching today's price action, the Bullish Hikkake Pattern which is known as bullish pattern and two bearish patterns, the Bearish Spinning Top and the Bearish High-Wave Candle. The last time a Bearish Spinning Top showed up on February 7th, COTTON actually gained 0.64% on the following trading day.
Prices are trading close to the key technical support level at 67.76 (S1).
The trend is clearly bullish, showing an intact uptrend in the short, medium and long-term.
Buying could speed up should prices move above the close-by swing high at 69.45 where further buy stops might get activated. With prices trading close to this year's low at 67.41, downside momentum could accelerate should COTTON break out to new lows for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for Cotton. Out of 466 times, COTTON closed higher 53.00% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 57.73% with an average market move of 1.05%.
With four out of the other five Consumer Commodity Markets closing lower today, the ones that stand out on the negative side are SUGAR losing -1.56% and LUMBER closing -0.91% lower. On the flipside the best performer has been COFFEE closing 4.23% higher. Read more