The Upside in Cattle Futures
Cattle futures look to be re-establishing its uptrend. Getting long in cattle futures makes for a good risk-reward opportunity because current prices are near the critical support line that needs to remain intact for the interpretation. Expectations are for prices to go into the mid 100’s.
Longer-term, it is expected to see a nice 50-62% retracement of the rally off the low that will present a great buying opportunity. Momentum signatures, along with other indicators, will either add or lower confidence at that time.
The Stochastics have gotten out of oversold territory. RSI getting established above the 60 level is one step in calling an end to the downtrend from earlier this year. If that happens, buyers can be more confident going long.
It will be nice for prices to regain the upper half of the Donchian Channel. Volume is confirming the recent rally. A coiling of the Donchian Channel often leads to an explosion of volatility as seen earlier this year…so beware.
