Monday, February 21, 2011
Cotton's unprecedented jump may just be halting
AHMEDABAD (Commodity Online): With a rise of almost 83%, Kapas investors made smart profits. But it is now due for a correction.
Kapas was trading around 700 levels in December 2010 and last week it made high of 1262. Prices are expected to correct at least 38% of its recent sharp rally which gives us target of 1044.
At the National Commodity and Derivatives Exchange counter, Kapas last week opened at 1235 and after making high of 1262 it gave weak close at 1199. Today at the start of week even it is trading down by half a percent near 1192. RSI is also showing divergence on daily charts. But selling confirmation will be below 1160.
“Technically, Short term risky traders can sell Kapas April contract on current levels of 1190 or for safe trading may wait for selling below 1160 with the stop loss of 1225,” said Bharti Navlani, Technical analyst withCommodity Online.
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