World sugar futures (ICE Futures US.SB) rallied 2.5% during Tuesday's session to close the day at 12.13¢. The gain came on a 'trend day' up pattern, where the open was in the lower 20% of the day's intra-day range while the close was in the upper 20%. This comes after SB had crossed below its 100-day moving average on Monday. Will Tuesday's rally spark more in the coming weeks?
Q: How has sugar performed in the past when it has recorded a 'trend day' rally after crossing below its 100-day moving average during the second quarter?
A: According to the seven previous occurrences of this event, EventEdge indicates that world sugar futures has shown a strong bullish edge that peaks 10 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, April 22, 2008) is Tuesday, May 6, 2008.
Sugar rallies in 100% of the cases (7 of 7) by an average of 7.6% relative to the close on the event date. Which, based on the close on the event date (12.13¢), provides a target price of 13.05¢.
If you would like to see more details of this historical edge, go to www.markethistory.com
Ronish Patel is an analyst with MarketHistory.com.
