By admin       2018-06-27

June 26, 2018 - Cotton prices have been under pressure the last couple of weeks. The futures contract on the Multi Commodity Exchange (MCX) made a high of ₹23,320 per bale on June 11 and has reversed sharply lower from there. The contract tumbled over 6 per cent from this high to make a low of ₹21,770 last week on Thursday and bounced slightly higher to trade at ₹22,190 per bale. The short-term view is negative for the MCX-Cotton futures contract. The recent reversal from the high happened from a crucial long-term trend resistance level. Though the contract has been consolidating around ₹22,000 over the last few days, any upmove in the near-term could be limited. Key resistances are poised between ₹22,350 and ₹22,650. An intermediate bounce to test these resistances in the near-term cannot be ruled out. But a strong break and a rally above ₹22,650 looks less probable. A fall to ₹21,450, a key short-term support level, is likely in the coming weeks. A break below , though less likely, can drag the contract to ₹21,000. The region between ₹21,450 and ₹21,000 is a strong medium-term support level which could halt the current downtrend. A strong upward reversal from this ₹21,450-21,000 support zone will have the potential to take the MCX-Cotton futures contract higher to ₹23,000 levels.

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