The 24th of Aug was a very important date for Sugar. We gapped lower and breached the Lower Tine of the recent Schiff Pitchfork… we looked all set to establish a new lower trading area when prices turned up on the day. The next day we gapped higher with a Bullish Opening White Marubozo and during the course of that week we made a really good Key Reversal Up on the Weekly Chart.
In addition, this weekly action helped in forming a Bull Hammer on the Monthly Chart, even if it was a down month. We have followed through on the upside last week… except for Friday. It may be that it is because of the long US holiday weekend but I was a bit concerned by the small Dark Cloud Cover Pattern formed on Friday.
Nevertheless, ½ of the MAs are pointing or starting to point upwards so I have changed the bullet point above into mildly bullish. The real concerns for any bulls are the following, a) the rapidly descending Medium MA (currently 11.84) just above the market. The last time the prices met that…well it was all over in a day and we had the start of the decline to the recent lows. 2) The failure to close above the key recent 50% Fib at 11.47. It is still early but the sooner there are two consecutive closes over that level then the better for the bulls. 3) Between the 50% Fib at 11.47 & the Medium MA there is the 2015 Downtrend (currently 11.71).
A minimum of two consecutive closes over this is needed to secure any bullishness – no ifs or buts! With all this, you can gather, I am not completely convinced of the case for the rally and would urge caution and careful study of all those three. Support currently is at 11.15, 11.02 (dynamic) 10.963, 10.75 & key between 10.44 – 10.52.
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