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Is Sugar Finally Breaking Out?

Published 09/27/2013, 06:55 AM
Updated 07/09/2023, 06:31 AM

Sometimes, as I watch CNBC Business, I get an impression that US stocks and US bonds are the only asset classes in the world (or at least the most important). And while the whole world is focusing on the amazing outperformance by US equities over the last two years, I continue to believe other asset classes present much much much.... much better opportunities.

Chart 1: Sugar has been building a base over the last few quarters
Sugar
After years of being below the 200 day moving average, Sugar is finally going to have a proper crack at breaking it in coming days or weeks. We saw huge volume in June, July and September. We also saw sugar trading above its 50 day moving average consistently in recent times. Now, it remains to be seen if and when the major break out will occur. Keep an eye out on this one.

Chart 2: After a prolonged period below 200 MA, Sugar could be breaking out
Sugar vs 200 MA
As a side note, despite the recent mini rally, Sugar is still down almost 12% over the last 12 months (rolling year on year performance) and has not traded above the 200 moving average for years. A powerful mean reversion rally could now be in the cards. Disclaimer: I'm long Sugar and continue to add, with recent purchase only a couple of weeks ago.

Chart 3: Sugar has performed miserably over the last few years
Sugar Performance

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