Sugar futures established a base for a possible rally during last week's price consolidation near the 25-cents per pound level. Autochartist has identified this as the lower end of a broad Channel Down chart pattern, with a projection for a move higher towards resistance in the near term.
The Channel Up pattern began forming after the swing high above 27-cents per pound and has made consistent tests of both the upper and lower boundaries of the channel. The market may remain inside this range for some time to come if the established downtrend proves to me the beginning of a bear market, which would establish entry and exit points for swing trading the short term moves. The pattern scores well overall with a Quality ranking of 7 bars.
The projected move off the channel support suggests a continuation of the current rally towards the resistance at 26.50 cents per pound. A move above this level would initiate an upside breakout, whereas a stalling of momentum would complete this leg up within the chart and create a short entry point for an eventual move back to the bottom of the channel.
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