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March 12, 2023
Friday at a glance: Cotton slid down from $82.18 to $78.18 per pound, taking a $4 loss (4.87%)
Support/Resistance levels obtained from chart analysis indicate that Cotton could begin to recover as it approaches significant support, now $1.36 away from $76.82. Dipping below could be an indication that further losses are ahead. Trend-following investors would be interested to note that the Commodity Channel Index (CCI) indicator is below -100, meaning the market price is unusually low and below its rolling moving average. Technical analysis indicates that a new, strong downtrend could be forthcoming with short positions favored. Having stamped out a session range of $78.18 to $82.25, Fibonacci-inclined ICE Cotton traders were highly concentrated around active Fibonacci support at $81.11. Analysis based on the asset volatility indicates that Cotton's lower Bollinger Band® is at $79.08, indicating that the asset has overextended to the downside and could, therefore, bounce back as buyers look for bargains.
With market volatility ebbing, the current technical outlook indicates ICE Cotton will remain range-bound for the immediate future.
Though the Cotton future has been dropping, other Softs have been performing better: Coffee goes up 1.26% Friday and closed at $175.05.
The commodity has been trending lower for about 2 months. Having set a significant high of $154.89 10 months ago, the Cotton future is trading 46.94% lower.
