July cotton futures (CTN25) present a buying opportunity on more price strength. See on the daily bar chart for July cotton futures that prices have seen a solid rebound from the early March low. This week’s price action has negated a price downtrend and a fledgling price uptrend is now in place. See, too, at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bullish posture. In fact, this week’s price action in July cotton is arguably the most bullish since early last fall.

Fundamentally, the cotton market bulls got a friendly USDA U.S. cotton-planting intentions number on Monday, March 31, at under 10 million acres. It’s my bias that cotton traders have factored into futures prices the bearish aspects of global trade tensions and a wobbly U.S. stock market. This would mean cotton prices can continue to trend sideways to higher in the coming weeks and months.

A move in July cotton futures prices above chart resistance at 68.50 cents would give the bulls more power and it would also become a buying opportunity. The upside price objective would be 75.00 cents, or above. Technical support, for which to place a protective sell stop just below, is located at 67.00 cents. 

IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): 

Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.