CATTLE Analysis: Higher placements bullish for FCATTLE

By IFCMarkets

Higher placements bullish for FCATTLE

US cattle placements rose in August. Will the FCATTLE continue gaining?

According to the USDA Cattle on Feed Report for September released last Friday, placements in feedlots during August were higher compared to same period a year ago: 1.884 million head in total, 9 percent above August 2018. Cattle on feed over 90 days and over 120 days were well above last year, but both appear to be displaying the typical seasonal declines. Against the backdrop of the report indicating strong demand for beef, higher placements are bullish for FCATTLE.

On the daily timeframe the FCATTLE: D1 has closed above the 200-day moving average MA(200).

• The Parabolic indicator gives a buy signal.
• The Donchian channel indicates uptrend: it is widening up.
• The MACD indicator gives a bullish signal: it is above the signal line and the gap is widening.
• The RSI oscillator is near the overbought zone but has not crossed into it.

We believe the bullish momentum will continue after the price breaches above the upper boundary of Donchian channel at 143.19. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below the lower Donchian boundary at 134.22. 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 expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (134.22) without reaching the order (143.19), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary

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