While ICE Cotton was in the midst of a 7 day downtrend— in which it lost a total of 4.4%— A possible change of direction spotted from Friday; Cotton went up to $80.36 per pound Friday, gaining 0.93%.
Technical analysis trend indicators suggest that Cotton made an initial breakout above its 21 day Simple Moving Average at $81.14, a potential indicator of a newly emerging bullish phase. ICE Cotton formed a session range of $79.6 to $81.76 leaving buyers and sellers highly concentrated around an active Fibonacci resistance level of $81.11. Friday's price action generated a Japanese candlestick pattern showing a "hammer” chart pattern. When appearing during a bearish trend, as it is now, it is typically considered to be an indication of a trend reversal. According to asset volatility analysis, Bollinger Band® analysis indicates that current price action is approaching the upper band at $83.67, thereby suggesting that the Cotton future is becoming overvalued. The Cotton future's notable support and resistance levels: although Cotton is appreciating today after rising as high as $81.76, price action is now slowing and consolidating around $1.19 below the $81.55 resistance level.
All in all, the technical analysis suggests the Cotton future has no clear-cut direction.
Rallies can also be seen in other Softs, Sugar is trading around $26.2 after ending Friday's session at $26 (up 0.69% today).
At the same time, Cocoa lost 0.87% Friday and closed at $3,003.
The commodity has been trending lower for about 4 months. 11 months ago ICE Cotton reached a significant high of $150.65 but has consequently lost 47.15% since then.