Cotton: Head and Shoulders Breakdown

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Since the May 17th highs, we have seen December Cotton in a downtrend. Looking at the formation of a head and shoulders pattern, there was a breakdown below support at 117.96, and prices have continued to grind lower. With the market currently right near the 200-day moving average, and the RSI indicating we are in oversold territory, there could be a nice rebound to the upside if we can hold this level. If the market breaks below the 200-day moving average, which has not happened since before the pandemic, there could see added selling until a new floor is established.