SUGAR

Symmetrical triangles are usually regarded as “continuation patterns”. This very common technical chart pattern contains at least two lower highs and two higher lows. Trend lines converge and take the symmetrical triangle shape. Though symmetrical triangles often mark a continuation of the trend, they sometimes mark major trend reversals. A safe way to analyze and trade these patterns is to wait for a valid breakout from the symmetrical triangle.

Sugar has been contracting in a range for the past one year. 200 day moving average has been flat at 25 levels and price has been volatile around the moving average. Over the past one year trend lines converged. Boundaries were at 23.60 and 28 levels. In the past one week Sugar price breached the lower boundary at 23.60 level. This could be the first signal of a multi-month downtrend and a symmetrical triangle marking a trend reversal. Intermediate/long-term technical outlook turned negative. With a stop-loss between 23.60 and 25, we can expect lower prices in the intermediate term. Unless we see the price reversing back above 23.60, negative technical outlook will remain intact.