Sugar futures may have found a bottom during Friday's session after stabilizing above the 24.50 cents per pound level over the course of last week's trading. Sugar has been hit hard in the recent commodities downdraft, giving up almost 8 cents per pound after reaching Multi-decadal highs prior to the sell-off.
The rounding bottom formation at 24.50 cents provides the lower support of a fairly well developed Triangle chart pattern, shown here on the longer term 240-minute time frame. Friday's reversal arrived just as the price hit the apex of the triangle and forced an upside breakout on very strong momentum. Follow-through to open the week ahead would be viewed as a bullish development and greatly increase the chance of a recovery rally. The projected price target from the breakout would place the nearby futures between 26.60 and 28.40 per pound to complete the pattern. This would place the market back near the point at which the triangle began forming and imply a wide sideways range for the intermediate term. A successful move to the top end of the forecast range may also indicate a resumption of the uptrend, with eventual new highs possible.
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