Trick or Treat
Sep 24, 2013
Trick or Treat?
With Halloween practically on our doorstep Sugar appears to be set up for a classic trick or treat. A "W" or double bottom is in place on the weekly chart. The market has climbed above the center Bollinger band and 9 bar exponential moving average. In addition it has rallied above the center of the "W" that forms the double bottom. The high volume that took place two weeks ago is indicative of a changing of the guard. It tells me short covering on a major degree has likely taken place. Generally a setup like this would create major buying interest. In this instance it has not. In my opinion getting long Sugar at this level puts the odds in the trader’s favor. Call option premiums are realistic and long futures positions can be entered with relatively tight stops. As I see it Sugar has broken out to the upside.
RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.