July sugar futures (SBN25) present a selling opportunity on more price weakness.
As seen on the daily bar chart for July ICE sugar futures, prices have been trending lower and last week hit a four-week low. Prices on Friday also closed at a technically bearish weekly low close. The bears have the near-term technical advantage. See at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bearish posture as both lines are trending down.
The sugar bears also have the advantage of seeing crude oil futures (CLK25), the leader of the raw commodity sector, in a price downtrend and last week hitting a four-year low. That’s giving pause to all raw commodity market bulls. Global trade tensions are also bearish for sugar, as they suggest less global economic growth, curtailed global trade, and reduced demand for major raw commodities.
A move in July sugar futures below chart support at last week’s low of 17.69 cents would become a selling opportunity. The downside price objective would be 15.75 cents, or below. Technical resistance, for which to place a protective buy stop just above, is located at 18.50 cents.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
