Cotton Seen Climbing to $1 on Elliott Wave: Technical Analysis
Cotton is set to rise as much as 32 percent to $1 a pound in the second half based on Elliott Wave Theory, said Commtrendz Risk Management Services Pvt. Ltd.
“An impulse move is under way as per Elliott Wave analysis and a corrective decline to 70 cents looks likely before prices resume the upward momentum towards 85 cents,” Gnanasekar Thiagarajan, a director at the Mumbai-based brokerage, said in a phone interview. “Chances are good for the upmove to sustain and push forward towards $1 in the second half.”
Futures fell 18 percent in 2012 and have slumped 65 percent from a record $2.197 in March 2011. Elliott Wave Theory, created by analyst Ralph Elliott in 1938, seeks to predict moves by dividing past trends into five sections, or waves.
The contract for March delivery climbed as much as 0.5 percent to 76.03 cents a pound in New York today and was at 75.73 cents at 4:18 p.m. in Mumbai. Futures last traded above $1 in November 2011.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index.
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