By IFCMarkets

Awaiting escape from the range

Let us consider the continuous Feeder Cattle CFD of FCATTLE. According to the weekly report by US Department of agriculture, released August, 15, producers packed 5.8% less beef than in the same period the year before. It happened because the demand for pork and chicken is higher due to lower prices as compared to relatively expensive beef. FCATTLE quotes are supported by decreasing feeder cattle livestock; this year it dropped 7% to 540 thousand animals.

On the daily chart the FCATTLE CFD has been traded in a narrow range below the 200-day Moving Average. Bollinger bands have shrunk, indicating low volatility. Parabolic and MACD have been giving buy signals. RSI-Bars is located below 50 and has not yet reached the oversold zone. We believe that a momentum may develop if the price goes up and breaches the latest fractal high at 213.2 or drops below the latest fractal low and the Bollinger band at 206.2. Let the market choose a direction itself. We may place two or more symmetrical positions. As soon as an order triggers we can cancel the remaining ones. After pending order activation the stop loss is supposed to be moved every day to the next fractal high (short position) or low (long position) after Parabolic and Bollinger signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. The most cautious traders are recommended to switch to the H4 time frame and place a stop loss there, moving it after the trend. If the price reaches the stop loss without triggering the order, we recommend to cancel the position: the market sustains internal changes that were not considered.

Market Analysis provided by IFCMarkets