Sugar’s Recent Key Reversal Week Tempts Bears
18 September 2009
At the beginning of September, following a significant bull run, a sharp sell-off produced a Key Reversal Week, heralding the end of the likely end of the bull phase and start of a medium term bear phase.
WEEKLY CHART - CONTINUATION:
The Key Reversal Week is clear – the risk is now to the downside.
Note how the old 19.73 2006 high exactly coincides with the 38.2% pullback level on the Oct chart below – some sort of support is likely at/above here.
DAILY CHART – OCT-09:
After the bull run failed at our Fibo projections the recent trading below the 23.6% pullback level and 21.22 21-Aug low provided a further bear signal/trigger.
As noted above, the 38.2% pullback coincides with the old 2006 high – a future support area.
S/term rallies are likely to be corrective/temporary only, ahead of another bear leg –first potential resistance lies at/below the 23.33 12-Aug high.
In the Commodity Trading Guide we are sellers on rallies, and currently favour the 23.00 area (ahead of that 23.33 high and a 61.8% bounce). Stops ideally will be around 25.00, just above 24.85 high. Partial profits targeted at 20.00, stops then tightening to cost to improve risk/reward. In the Mar contract this equates to 24.50 entry, 26.50 stop, 21.00 initial target.
Next story:
The S&P – how much further? 
Previous story:
UK Gilt market’s uncertainty