Live cattle futures have enjoyed a tremendous recovery following the breakdown observed in Q4 of 2023, but is the rally due for a correction? Last Friday’s price action saw April Live Cattle Futures break back above the 50% retracement from the late October highs, and also breach into overbought territory on the standard 14-day RSI. The “Halfway Back” point is one of the more psychologically significant retracement levels, and typically serves as formidable resistance – at least in the short-term. With the strength observed over the last 5 trading sessions, it might be time for bulls to start capturing profits and liquidating long positions. One possible area of support is the 38.2% retracement around the 178.600 level, which would be a nearly 3 dollar correction in the short-term. A 3 dollar correction would likely pull the RSI back below overbought territory, and serve as a strong re-entry point for cattle bulls.
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