Sugar futures sold off along with most of the commodities complex in Thursday's trading session, as another huge down day in the stock market spilled over into nearly every asset class. The weakness in sugar arrived at a pivotal price level and may portend further selling to come. The upper border of the large Channel Up chart pattern, shown here on the 240 minute time interval, found sellers and set up a short entry for the day.
Resistance at 29.50 cents per pound may cap any upside rallies in the near term, with expectations for support at the bottom end of the channel to be retested on a resumption of the slide. The bottom end of the channel currently rests at 27.50 cents per pound, which also coincided with a longer term support level.
The overall trend in this market remains solidly bullish and this correction may yield a buying opportunity once it plays out. As long as the equity markets are in a panic selling mode however, the spillover effect is likely to keep the downward pressure on sugar and most other commodities (excluding the precious metals, which are moving higher in a flight to safety reaction). A move above the resistance at 29.50 in the current climate would be extremely bullish, but appears unlikely for the time being.
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