FEEDCATTLE unable to break through key resistance level
Feeder Cattle (FEEDCATTLE) Technical Analysis Report for Jan 23, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, FEEDCATTLE finished Thursday at 140.700 tanking $2.275 (-1.59%). This is the biggest single-day loss in over two months. The last time we've seen such an unusually strong single-day loss on November 22, 2019, FEEDCATTLE actually gained 2.01% on the following trading day. Today's close at 140.700 marks the lowest recorded closing price since December 5, 2019. Closing below Wednesday's low at 142.950, Cattle confirmed its breakout through the prior session low after trading up to $2.600 below it intraday.
Daily Candlestick Chart (FEEDCATTLE as at Jan 23, 2020):
Thursday's trading range has been $3.600 (2.52%), that's far above the last trading month's daily average range of $1.918. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for FEEDCATTLE.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading as low as 140.350 during the day, the contract found support at the 100-day moving average at 140.549. Unable to break through the key technical resistance level at 143.175 (R2), the market closed below it after spiking up to 143.950 earlier during the day. The failure to close above the resistance could increase that levels significance going forward.
Crossing below the lower Bollinger Band for the first time since November 22, 2019, prices have shown unusually strong downward momentum in the short-term. This might either indicate a potential selling climax after which prices could head back up towards the mean of the Bollinger Bands at 144.748 or signal the beginning of a strong momentum breakout leading to even lower prices.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already.
Further selling might move prices lower should the market test December's close-by low at 139.725.
Among the 11 market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Price broke through Technical Support S1" stand out. Its common bearish interpretation has been confirmed for Feeder Cattle. Out of 293 times, FEEDCATTLE closed lower 55.63% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 49.49% with an average market move of -0.03%.
With one of the other Meat and Livestock Commodity Markets closing higher and one closing lower today, the winners of the day are LEANHOGS surging 1.61%. On the flipside the worst performer has been LIVECATTLE closing -1.95% lower. Read more