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SUGAR Technical Analysis - SUGAR Trading: 2017-12-21
Brazil sugar cane output downgrade bullish for sugar prices
Brazil sugar cane output estimate downgrade is bullish for sugar prices. Will the sugar price continue rising?
Conab, the official Brazilian crop bureau, Brazil’s domestic sugar cane output estimate to 635.6m tons in 2017-18. Brazil is the top sugar producing country in the world, and lower sugar cane crop is bullish for sugar prices.
On the daily timeframe SUGAR: D1 has been retracing following the decline after hitting 6 month high in the end of November. It is testing the 50-day moving average MA(50).
- The Parabolic indicator gives a buy signal.
- The Donchian channel indicates downtrend: it is tilted down.
- The MACD indicator is bullish: it is below the signal line and the gap is narrowing.
- The stochastic oscillator is rising but hasn’t reached the overbought zone yet.
We believe the bullish momentum will continue after the price breaches above MA(50) at 14.54. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below the fractal low at 13.54. After placing the order, the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (13.54) without reaching the order (14.54), we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Technical Analysis Summary
| Position | Buy |
| Buy stop | Above 14.54 |
| Stop loss | Below 13.54 |
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