Have Sugar Prices Bottomed ?

Sugar Futures---Sugar futures in the March contract is currently trading higher by 4 points in a relatively quiet trade this Wednesday afternoon in New York as prices filled the gap that was created on Monday.

At the current time I'm not involved, but I do have many clients who are bullish and if you did take a bullish position I would place the stop-loss under the contract low which was hit on September 12th at 11.74 as the risk would be around $500 per contract plus slippage and commission, but as I stated before I am waiting for a bottoming pattern before entering into a bullish position as I do think the downside is limited.

Sugar prices are trading right at their 20 day but still far below their 100 day moving average which stands around the 13.00 level as the trend is mixed however, a potentially bullish factor for sugar prices was last Friday's weekly Commitment of Traders (COT) data showed that funds boosted their net-short position by 29,486 contracts in the week ended Sep 10th to 218,896 contracts to a record high in data going back to 2006, which could provide fuel for a short-covering rally.

In my opinion wait for the chart structure to improve which will take a couple more weeks therefor the risk/reward would be more in your favor.

TREND: MIXED

CHART STRUCTURE: IMPROVING

VOLATILITY: AVERAGE

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