Lean Hogs: Technical Analysis – Strong export demand bullish for pork prices

By IFCMarkets

Strong export demand bullish for LHOG

Rising US pork exports point to strong pork demand. Will the LHOG continue rising?

The US Department of Agriculture estimated new pork export sales for May 4-10, 2018 week at 21,900 tons, up 33% from the previous week and 12% from the prior 4-week average. Higher demand for export is bullish for pork prices.

On the daily timeframe the LHOG: D1 has been rising after hitting 7-month low in the beginning of April. It is above the 50-day moving average MA(50) which is rising too.

• The Parabolic indicator has formed a sell signal.
• The Donchian channel indicates no trend yet: it is flat.
• The MACD indicator gives a nuetral signal: it is above the signal line and the gap is steady.
• The Stochastic oscillator is rising but has not breached into the overbought zone.

We expect the bullish momentum will resume after the price breaches above the upper Donchian bound at 77.4153. A price below that level can be used as an entry point for a pending order to buy. The stop loss can be placed below the lower Donchian bound at 71.47. After placing the pending order, the stop loss is to be moved to the next fractal low, following Parabolic signals. By doing so, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (71.47) without reaching the order, we recommend canceling the order: the market sustains internal changes which were not taken into account.

Technical Analysis Summary

Position	Buy
Buy stop	Above 77.415
Stop loss	Below 71.47

Market Analysis provided by IFCMarkets