SUGAR: Technical Analysis – Hurricane damage concerns bullish for sugar prices

By IFCMarkets

Hurricane damage concerns are bullish for sugar prices

Concerns about damage to sugar cane fields in Caribbean and Florida are bullish for sugar prices. Will the sugar price continue rising?

Concerns about damage to sugar cane fields in Caribbean area and Florida are bullish for sugar prices. Oil and ethanol prices also influence raw sugar prices as higher ethanol prices make diverting cane to ethanol production more attractive. The harvest begins October 1. Florida sugar cane accounts for nearly a quarter of sugar produced in the United States, according to the US Department of Agriculture.

Sugar price

On the daily timeframe SUGAR: D1 has been retracing higher after hitting 19 month low in early June.

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  • The Parabolic indicator gives a buy signal.
  • The Donchian channel indicates no trend yet: it is flat.
  • The MACD indicator is bullish: it is above the signal line and the gap is widening.
  • The stochastic oscillator is rising but hasn’t reached the overbought zone yet.

We believe the bullish momentum will continue after the price closes above upper boundary of Donchian channel at 14.81. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed below the fractal low at 14.1. After placing the order, the stop loss is to be moved every day to the next fractal high, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (14.81) without reaching the order (14.1), we recommend cancelling the position: the market sustains internal changes which were not taken into account.

Technical Analysis Summary

Sell stopAbove 14.81
Stop lossBelow 14.1

Market Analysis provided by IFCMarkets