ICE March sugar futures plunged to fresh 2012 lows Wednesday, amid a continuing and dominant bear trend on the daily chart. The sellers remain in control and there are few chart signals to suggest an end to the bear trend soon.
ICE March sugar recently traded down 34 points at $18.54 cents.
The market pushed under the most recent Nov. 9 swing low at $18.66 cents on Wednesday to score the fresh low for the year.
Bottom line? "The prevailing bear trend is intact," said Terry Gabriel, global head of technical analysis at Ideaglobal.
Looking ahead, Mr. Gabriel said "I would expect a continuation of the decline over the next two to four weeks toward the 18.25 area." Farther out on a multimonth basis, Mr. Gabriel said he saw potential for even more severe declines in sugar prices toward the "low 17.00, high 16.00 area."
Overall, the technical picture "still looks very bearish. Momentum indicators are either deteriorating or showing a particularly weak market. Sugar remains below short- and long-term moving averages and the slope of the moving averages are negative. As of now, there are no impending signs of a trend change," Mr. Gabriel explained.
The 200-day moving average currently lies at 21.52. The sugar contract is trading well below that major moving average, which trend following traders generally interpret as a negative sign.
The nine-day relative strength index, or RSI, a widely watched momentum tool is trending lower, currently at 33%.
On the upside, Mr. Gabriel did pinpoint a minor resistance area at the 18.91-19.04 level. Beyond that, he saw stiffer resistance at the 19.25 area. "We would have to reverse above 19.25 to suggest a surprise double bottom. But, I don't expect that. I see a new bear leg unfolding," he concluded.
