Cotton Analysis March 2015 (D)

Cotton has traded as expected since the recent report, Cotton Tipped To Rise. However, there is some new information so let’s quickly update things using the daily chart.


We can see price took out the October 2014 high and has subsequently traded lower. So, we have a higher low in place and now look for price to trade back down and put in a higher low.
The Parabolic Stop and Reverse (PSAR) indicator now has a bearish bias with the dots over price and this increases the likelihood that price is now headed back down.
The Bollinger Bands show the recent top traded well above the upper band signifying a solid high is in place.
The Relative Strength Indicator (RSI) made a new high which suggests this move up is in its infancy. I favour the final rally high to be companied by one of more bearish divergences.
The Moving Average Convergence Divergence (MACD) indicator has just made a bearish crossover which is more evidence a short term top is in place. 
As for where the pullback low will be, I have added Fibonacci retracement levels of the recent move up and I favour a deep retracement back to at least the 76.4% level which stands at US$59.53. Let’s see.


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