Looking at the daily chart starting in February May cotton seemed to get stuck between 82-84, with a one day test of 85.00. Now see cotton closing over 85.00 for the past three trading sessions. While ADX did drop from above 60 (very strong trend) to under 25 the past few weeks, we now see ADX has turned up again and DI+ has crossed up over DI- with DI Differential rising. Stochastics are back in overbought territory. So the daily charts reflect the bulls taking a breather in February.
Click to enlarge.
Now for March they look like they may have caught their breath. Could we see a break above 90 soon? With a possible drop of 23% U.S. cotton acreage, that may be in the cards. We will get confirmation of this on March 28 when the Perspective Plantings will be released.
Have a prosperous trading week.
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