Lean Hogs: Technical Analysis – Higher US pork consumption and exports bullish

By IFCMarkets

Higher US pork consumption and exports bullish for LHOG

US pork consumption and exports are forecast to rise. Will LHOG continue rallying?

US exports are expected to rise 3.7% in 2018 on back of strong demand in major global importers Mexico, China and Japan according to Rabobank, a leading global agriculture financing bank. US domestic demand for pork is estimated to remain strong in 2018. Strong domestic consumption and export demand for pork are bullish for lean hog prices.

On the daily timeframe LHOG: D1 has been retracing after declining to five-week low in mid-October. It has breached above the 50-day moving average MA(50).

• The Donchian channel indicates no trend yet: it is flat.
• The Parabolic indicator has formed a buy signal.
• The MACD indicator is bullish: it is above the signal line and the gap is widening.
• The stochastic oscillator is rising but has not reached the overboughr zone.

We believe the bullish momentum will continue after the price closes above the upper boundary of Donchian channel at 67.883. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below the last fractal low at 63.191. After placing the order, the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (63.191) without reaching the order (67.883), we recommend cancelling the position: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary

Market Analysis provided by IFCMarkets