Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20
THE STOCK MARKET BIG PICTURE - Video - 19th Nov 20
Reasons why Bitcoin is Treading at it's Highest Level Since 2017 and a Warning - 19th Nov 20
Media Celebrates after Trump’s Pro-Gold Fed Nominee Gets Blocked - 19th Nov 20
DJIA Short-term Stock Market Technical Trend Analysis - 19th Nov 20
Demoncracy Ushers in the Flu World Order How to Survive and Profit From What Is Coming - 19th Nov 20
US Bond Market: "When Investors Should Worry" - 18th Nov 20
Gold Remains the Best Pandemic Insurance - 18th Nov 20
GPU Fan Not Spinning FIX - How to Easily Extend the Life of Your Gaming PC System - 18th Nov 20
Dow Jones E-Mini Futures Tag 30k Twice – Setting Up Stock Market Double Top - 18th Nov 20
Edge Computing Is Leading the Next Great Tech Revolution - 18th Nov 20
This Chart Signals When Gold Stocks Will Explode - 17th Nov 20
Gold Price Momentous ally From 2000 Compared To SPY Stock Market and Nasdaq - 17th Nov 20
Creating Marketing Campaigns Using the Freedom of Information Act - 17th Nov 20
ILLEGITIMATE PRESIDENT - 17th Nov 20
Stock Market Uptrend in Process - 17th Nov 20
How My Friend Made $128,000 Investing in Stocks Without Knowing It - 16th Nov 20
Free-spending Biden and/or continued Fed stimulus will hike Gold prices - 16th Nov 20
Top Cheap Budgie Toys - Every Budgie Owner Should Have These Safe Bird Toys! - 16th Nov 20
Line Up For Your Jab to get your Covaids Freedom Pass and a 5% Work From Home Tax - 16th Nov 20
You May Have Overlooked These “Sleeper” Precious Metals - 16th Nov 20
Demystifying interesting facts about online Casinos - 16th Nov 20
What's Ahead for the Gold Market? - 15th Nov 20
Gold’s Momentous Rally From 2000 Compared To Stock Market SPY & QQQ - 15th Nov 20
Overclockers UK Quality of Custom Gaming System Build - OEM Windows Sticker? - 15th Nov 20
UK GCSE Exams 2021 CANCELLED! Grades Based on Mock Exams and Teacher Assessments - 15th Nov 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Sugar Price Set To Correct

Commodities / Agricultural Commodities Sep 09, 2016 - 12:28 PM GMT

By: Austin_Galt

Commodities

The sugar price has experienced a solid move up off the lows putting in a high back in July at $21.10. Since then price looks to be in a process of distribution and I expect a more substantial correction to take place.

Let's take a bottom up approach to the analysis beginning with the daily chart.


Sugar Daily Chart

Sugar Daily Chart

We can see this 2 month period of accumulation and distribution since the 5th July 2016 high. Of course, it is possible for price to now launch to new highs but I favour the other side of the coin to land with a move down.

The Bollinger Bands show price bouncing up and down between the higher and lower bands with price currently around the middle band. I doubt price will now get back up to the upper band and believe a solid move lower is just around the corner.

The horizontal line denotes a bearish double top that has formed during this distribution phase at the $20.94 level and price breaking above there now would likely nullify this analysis.

I have added Fibonacci retracement levels of the move down from top to low and this double top clipped the 88.6% level so a deep retracement which is consistent for the first rally in a new bear trend.

I have drawn a Fibonacci Fan from the February 2016 low to high. This shows price finding support after the high at the 38.2% angle with the next high being at resistance from the 23.6% angle, Price has now broken below the 38.2% angle which now represents resistance. Price is now testing this resistance and I expect it to send price back down shortly.

The RSI and MACD indicator both showed a bearish divergence at the high and have continued to trend down ever since.

Sugar Weekly Chart

Sugar Weekly Chart

The Bollinger Bands show the bands tightening with price finding support at the middle band. I favour this support to give way shortly.

The PSAR indicator is my super loose setting and has now turned bearish with the dots above price.

I have drawn a Fibonacci Fan from the August 2015 low to first swing high in December 2015. This shows the February 2016 low at support from the 76.4% angle with price subsequently shooting much higher with the high just below resistance from the 38.2% angle. Price has now broken below support from the 50% angle and looks to be struggling to keep in touch. I expect price to give up shortly and make its way to the next angle beyond with the final higher low to be around support from the 88.6% angle.

I have added Fibonacci retracement levels of the whole move higher. Looking retroactively, the February 2016 low was around support from the 76.4% level so I expect the next higher low to be up around the next support area which is the 61.8% level at $14.32.

The December 2015 high at $15.85 now represents support and I favour price to push below that level as it gives that support a thorough test.

The moving averages with time periods of 100 (red) and 200 (black) are still in bearish formation so it is probably being a bit optimistic to expect another surge higher while this remains the case. Well, certainly not an extended surge higher.

The RSI recently made a new high which is bullish for the longer term but perhaps a move back to near oversold territory will occur over the shorter term.

The MACD indicator is currently bearish.

Let's wrap things up with the monthly chart.

Sugar Monthly Chart

Sugar Monthly Chart

The Bollinger Bands show price appearing to be starting to move away from the upper band. This doesn't rule out price having another lash at the upper band but as it stands currently I favour a move back to the middle band at the minimum and possibly even the lower band given the fullness of time.

I have drawn a Fibonacci Fan from the February 2011 high to August 2015 low. Price now seems to be encountering resistance at the 50% angle and I favour a correction back to support from the 38.2% angle.

The RSI is looking strong but might need a breather while the same could be said of the MACD indicator which remains bullish.

Summing up, I believe a more substantial correction is set to occur over the intermediate term after which the bull trend should resume taking price even higher. If I am wrong about the high being in place then I would imagine a marginal false break only playing out.

By Austin Galt

www.thevoodooanalyst.com 

Austin Galt is The Voodoo Analyst. I have studied charts for over 20 years and am currently a private trader. Several years ago I worked as a licensed advisor with a well known Australian stock broker. While there was an abundance of fundamental analysts, there seemed to be a dearth of technical analysts. My aim here is to provide my view of technical analysis that is both intriguing and misunderstood by many. I like to refer to it as the black magic of stock market analysis.

Email - info@thevoodooanalyst.com 

My website is www.thevoodooanalyst.com 

© 2016 Copyright  The Voodoo Analyst - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Austin Galt Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules