A look at the 1-year chart of Sugar (SGG).
- In the beginning of november, the resistance line of the top of February was broken, after a fabulous 6-month grow
- The rise was too fast, so a pull back was normal. It was a ginormous pull-back untill the top-level of february. The resistance level became a support
- That support did not hold, and the stock fell below, to the 50d MA as a support level
- SGG is now fighting that level and is currently breaking the resistance level of the top of February again.
- If that one holds, the 52-wk high would be the next target.
Some background from ETF daily news :
- Still, one can make the argument that sugar should be higher, especially considering that growing consumption is expected in emerging markets like China, where we’ve yet to hit the limit of their commodity appetite. Plus, over the past few years, we’ve seen drawdowns in world inventories of the sweet stuff, a fact that helped boost prices up to ever-higher highs in 2007/08 and 2008/09.
- Brazil, the world’s largest producer of sugar, saw sugar cane production declines from a hotter summer than usual, while similar drought conditions stunted Russian beet production and South African cane yields. Meanwhile, in Indonesia and Australia, the sugar cane harvest withered under a deluge of super-wet weather.