The Commodity Specialist view – Following a dramatic collapse in Sugar prices earlier this year good support was finally found from a long term 76.4% retracement. Subsequent recovery has been steady so far, but there is a chance now that bulls, at least temporarily, could tire.
- SUGAR 11 – WEEKLY CONTINUATION CHART:
Good support came from around the long term 76.4% pullback level. The 13.67 May low on the Oct chart coincides nicely with this 76.4% level.
Note how the 38.2% recovery level here coincides with the old early 2006 high, where resistance was recently seen.
The market could yet struggle to hold above this over the shorter term. - SUGAR 11 – DAILY CHART OCT-10:
The bull move has stayed in force, with eyes on the 20.63/21.20 area, 76.4% recovery and prior congestion low from early 2010.
The chart structure suggests resistance should be likely here, but also note the negative RSI divergence that indicates certain fatigue setting in.
At this stage a drop through the rising support line near 19.00 would signal initial momentum loss, to be confirmed by a violation of the 17.51 10-Aug low.
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