Following last week’s bounce off the Fibonacci Confluence Zone from 17.29 – 17.31, prices of sugar have remained neutral and continue to churn sideways. Friday’s session was relatively weak taking prices back down around 17.45, and potentially setting up for another retest of previously mentioned support around 17.30.
Furthermore, the most recent RSI readings have dipped slightly below the 20-level on the indicator, representing a severely oversold market environment. In the event that price comes down to retest the 17.30 area with a corresponding “oversold” signal, or bullish divergence signal, in the RSI, then there could be a valid buying opportunity for traders looking to get long sugar.
If price is going to continue to churn sideways, an argument could be made for a retest of the 17.85 level to the upside, followed by additional resistance from 18.03 – 18.12. However, in the event of further downside follow-through below 17.29, price will likely gravitate toward the 16.92 – 17.05 support area on the chart. Near-term momentum continues to be neutral and momentum studies could provide valuable information in assessing the validity of buy/sell signals in the market today. Continue to use these indicators, along with significant S/R within the market, to assess potential trading opportunities.
Sugar 30-minute Bar Chart (e-Signal)
The Nasdaq has been the weakest of the three sisters over the past few weeks and continues to put in lower lows and lower highs on the chart. The directional bias appears to favor the short side of the market with near-term momentum relatively flat. The market ran into some significant resistance toward the end of last week and looks to follow-through on this reversal heading into this weeks’ trade. A potential “double top” formation can be seen at the 61.8% retracement (shown as 38.2) on the chart.
With additional resistance at the 3600.00 level as well as an intermediate-term descending trendline which intersects price around 3589.00 today, it appears as though the path of least resistance in the NASDAQ is lower. If price continues to probe lower, traders could consider the 3530.00 – 3535.75 area on the chart as initial support and a potential profit objective for shorts.
Sustained weakness below here will likely target the 3492.00 support pivot. In the event that price is able to produce a close above resistance at 3608.00, traders should reassess the technical outlook of this market as a close above resistance could open the door for a rally back up to the 3658.50 – 3669.50 area on the chart.
Nasdaq 100 30-minute Bar Chart (e-Signal)
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