Probable upturn after longstanding low
Today we present you the continuous SUGAR CFD.After rebounding from the recent 6.5-year low it has been demonstratingsustainable growth. The reason is the lowered forecast for sugar crops inBrazil and Central America. Apart from it China reported the 20% decrease insugar-cane acreage in Guangxi region and the 37% contraction in Hainan region(the season 2015/2016). Vietnam expects the 10.2% drop in sugar production ascompared to the previous year. This news came along with the July futuresexpiration at Intercontinental Exchange, accompanied with a wide-scale positioncoverage. Thus, the sugar quotes may have advanced partly due to technicalfactors, which increases risks. Growth in prices should come amid negativecrops forecasts.
The SUGAR CFD tends to go upon the daily time frame. After escaping the bearish trend it has been trying toshape the double bottom analysis pattern. Bollinger Bands haveexpanded, indicating growing volatility. The latestMACD bars are located below the zero and the signal levels, which appears to bea bullish signal. Parabolic does not contradict the MACD indicator. RSI-Barshave been moving up but has not yet reached the overbought zone. The sugar CFDchart is far from Fibonacci levels. The bullish momentum may continue, if thenext bar closes above the Bollinger upper boundary and two fractal highs thatare now located at 12.63. A stop loss may be placed at the latest Paraboliclower mark at 11.5 or below the 6.5-year price minimum at 11.43. After pendingorder placing, the stop loss is supposed to be moved every four hours near thenext fractal low, following Parabolic and Bollinger signals. Thus, we arechanging the probable profit/loss ratio to the breakeven point. The mostcautious traders are recommended to switch to the H4 time frame and place astop loss, moving it after the trend. If the price reaches the stop levelwithout triggering the order we recommend to cancel the position: the marketsustains internal changes that were not considered.
Position
Buy
Buy stop
above 12.63
Stop loss
below 11.5 or 11.43
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