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Sugar: Forms a large contracting triangle

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Elliot Wave Analysis for SUGAR

Sugar is a carbohydrate, which is soluble and is found within the foods. The known to all of us white sugar that we are consuming is a disaccharide, consisting of glucose and fructose. Sugars are found within the honey, fruits, and tissues of many plants. From the sucrose is made the refined sugar, so the production of glucose and fructose, in 2016 came out to be approximately 2 billion tones. Sugar is used by people, in giving a sweet taste to cooking, cakes, and beverages. According to the World Health Organization, sugar in 2015, had a negative effect on metabolism and fatness, due to its average consumption of almost 24 kilograms a person annually. As concerning the traded value, just to remind the all-time high in November 1974, at $66, as well as the nowadays price at $19,92.

Monthly Range: Completing a triangle wave ((IV))

Image 30

            Looking at the monthly chart (log scale), the sideways correction that has been taking place from 1974 (end of ((III)) till now, hasn’t finished yet. Measuring the 3s, from this unfolded ((IV)) wave, we can observe an (a), a (b) – which its structure was made from a b lesser degree (contracting triangle), as well as a c (contracting diagonal)-, and an unfinished (c), in which the a and b were already formed, and we expect the last c of (c) to maybe touch the hypothetical bottom trendline.

            The subdivision of b of (c) was a nice flat, with the ((A)), the ((B)), and the ((C)) (3-3-5 structure for flats). Also, the subdivision of ((A)), was a zig-zag formation of (A), (B), and (C). Therefore, if the b is finished, the market should go down for the last c of (c). With a simple estimation, looking at the a is extremely possible to be touched the bottom trendline from c, as a 1:1 ratio equivalent, between a and c in a zig-zag correction.

Weekly Range: Completing wave (C) of a triangle wave ((IV))

Image 32

On the weekly chart (log scale), it seems that the b hasn’t completed this unfolding, because we cannot count any 5-wave mode for the ((C)). We know that the flats have a structure of 3-3-5. Also, the market hasn’t made any lower lows to assume a downtrend. Of course, in order to keep the analysis simple, the downside scenario could happen, if Sugar tries to break the end of (A) of ((B)). Then we will be absolutely sure of the short-term trend.

Additionally, the non-completed ((C)), must not go beyond the $36,08, which was the peak level of (b) of ((IV)). Such a scenario would change the whole counting. Below, on the daily chart, we will observe better this uncompleted b of (c), so that to feel more secure about our estimations.

Daily Range: Higher in wave (5)

Image 33

             Zoomed in the daily chart (log scale), we can figure out, why the b hasn’t finished yet. The market insists on an uptrend so far, and until we see an important decline, breaking some first supports, we cannot feel comfortable trading short.

            However, after this rally, it’s also difficult to trade at the opposite side, meaning the uptrend, until the b is finished because the risk/reward isn’t at least 1:3. Thus, the only advantage is to wait and trade the downtrend, when the market gives us the opportunity. For sure, we will have the probabilities in our favor, due to the risk/reward ratio.

Till now, the sugar has traded at $20,69 on 18 November 2021, and never exceeded this high afterward. If it may hold this resistance level, then soon we will see a fall and will be the time to make our decision.

See More Analysis For Commodity Market:

Written by Trade Zign

TradeZign (TZ) is a market forecasting firm,TZ's 10 full-time analysts cover every major market (commodities, stocks, energy, bonds, metals, currencies).


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