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SUGAR Technical Analysis - SUGAR Trading: 2017-06-08
Expected increase in India sugar output is bearish for sugar prices
Higher expected sugar production in India is bearish for sugar. Will the sugar price continue falling?
Monsoon has arrived early in India, the second-ranked sugar producing country. India's annual monsoon rainfall is expected to be 98% of the long-term average, the state-run India Meteorological Department said on Tuesday, raising prospects of higher farm output. The National Federation of Co-operative Sugar Factories estimates Indian sugar production will rise 25% year-on-year to 25m tons. Higher production is bearish for sugar prices as it is expected to reduce country’s imports this year.
On the daily timeframe SUGAR: D1 has been trading with negative bias since early February. Price is below the 200-day moving average MA(200) .
- The Parabolic indicator gives a sell signal.
- The Donchian channel gives no signal: it is flat.
- The MACD indicator is neutral: it is below the signal line and the gap is steady.
- The stochastic oscillator is edging up from the oversold zone.
We believe the bearish momentum will continue after the price closes below lower boundary of Donchian channel at 13.78. This level can be used as an entry point for placing a pending order to sell. The stop loss can be placed above the Parabolic signal at 15.53. 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 (15.53) without reaching the order (13.78), we recommend cancelling the position: the market sustains internal changes which were not taken into account.
Technical Analysis Summary
| Position | Sell |
| Sell stop | Below 13.78 |
| Stop loss | Above 15.53 |
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