Commodity Research Desk Cotton Insight Friday, 16 January 2015 Cotton: Technical Recommendation Commodity Contract S2 S1 CMP R1 R2 Cotton NYBOT-ICE Mar-15 59.35 59.42 59.53 59.65 59.76 Cotton MCX Jan-15 15032 15078 15130 15167 15200 Cotton Ace Feb-15 31763 31857 31950 32057 32163 Cocud NCDEX Feb-15 1446 1453 1460 1465 1470 Kapas NCDEX Apr-15 771 772 773 774 774 Market Review: Cotton market witnessed downward trend which make cotton to trade lower to negative notes in future market. Cotton traded at unchanged price of Rs.32700/candy for cotton lint in Maharashtra while Major spot markets were closed in Telangana and Gujarat. Meanwhile Future markets reported sideways to lower trend across different exchanges. However MCX January future price moved up marginally to settle the future at Rs.15130/bale, up by 0.07% against last day. Recommendation Sell at 59.84-59.86 TP 59.42/59.35 SL 60.30 Sell at 15200-15210 TP 15080/15036 SL 15300 Sell at 32060-32070 TP 31860/31770 SL 32170 Sell at 1462-1464 TP 1446/1435 SL 1475 Trading range 778-768 Major Spot Market Update : Cotton (Rs./Bale) 15/1/2015 14/1/2015 % Rajkot 31900 32000 -0.31% Akola 32700 32500 0.62% Futures Price Performance: Date MCX % NYBOT % 1/13/2015 15250 0.46% 60.15 0.70% 1/14/2015 15120 -0.85% 58.98 -1.95% 1/15/2015 15130 0.07% 59.49 0.86% Cotlook Index: ACE cotton February future traded on negative cues and closed at Rs.31950/Candy,0.75% lower against previous day. Meanwhile ICE cotton march future traded on positive notes owing to improved weekly export data and settled at 59.49 Cent/Lb, 0.9% higher than previous day Outlook and Strategy: Cotton prices witnessed downward trend since starting of this month and it may continue in coming days also. As Indian cotton exporter are facing stiff competion in global market due to comparatively higher price of yarns. Indian cotton export is estimated to shurk by 47% this year as for USDA estimation. Dull export and subdued demand from domestic mills is the main concern for the cotton traders. Meanwhile Cotton Corporation of India has procured 4.4 million bales of cotton under its procurement plan and has planed to sell the procured cotton from next week. Spot market may wittness slight increase in arrivals in coming days which may drift the cotton price at lower level. As for CCI estimation , 60 to 70% arrivals of total crop still has to come in the market. Ginning mills also reported limited buying and running below to their capacity in Telangan and Maharashtra due to slack demand from spinners. From Global market front, US market reported slight impovement in export of cotton last week and it was 11% up against previous week and 21% up from prior four week recorded on 8th Jan. The primary destinations were China (49,900 RB), Indonesia (43,500 RB), Vietnam (40,100 RB), Turkey (38,000 RB), and Mexico (13,000 RB). Meanwhile global ending stock is forecast to grow to 21.6 MT, which is up around 9% from 19.57 MT recorded in the previous year. Cotton Insight: A comprehensive daily covering MCX, ACE and NYBOT-ICE Technical Analysis Chart: E= Cotton Insight Overall we believe cotton may trade on lower to negative notes during today’s trading session in domestic market. Derivative Analysis: 15800 7000 33500 6000 33000 15500 5000 32500 15400 4000 32000 15200 3000 31500 15100 2000 31000 1000 30500 Cotton-MCX PVOI 15700 15600 15300 15000 14900 14800 0 6-Jan 7-Jan 8-Jan 9-Jan 10-Jan 11-Jan 12-Jan 13-Jan 14-Jan 15-Jan Open Interest Volume Open Interest Volume Price Price Spread Analysis: Spread Analysis: 250 450 400 350 300 250 200 150 100 50 0 ACE COTTON PVOI 600 MCX: Time Spread: January- February ACE: Time Spread: January- February 500 200 400 150 300 100 200 50 100 0 0 Prepared By: Function Analyst Head of Research-Commodity & Currency Aurobinda Prasad Fundamental Analyst Ravi Shankar Pandey Technical Analyst Ramesh Chenchala To unsubscribe please mail us at [email protected] Disclaimer The report contains the opinions of the author, which are not to be construed as investment advices. 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