Buyers were hammering a key retracement level from below. The way I learned it, "The more times a level is tested, the higher the likelihood it breaks."
Three months later…
The July contract is knocking on the door – again!
How polite.
Check out July cotton nearing the January 2022 closing high of 88.34:
That’s my level.
If and when the July contract breaks above 88.50 (let’s give it a little room), I like it long with an initial target of approximately 106. I’m also watching for a 14-day RSI reading greater than 70 for bullish confirmation.
Not all contracts are approaching buy zones this week. Copper and crude have come under increased selling pressure. Gold undercut a former support level.
In fact, most of the commodity space lacks any sign of constructive rotation.
But have you seen a chart of sugar or cocoa futures lately? Soft contracts have been working!
