Sugar Futures Trading 2012 longstanding level

Sugar futures launched out of its recent trading range on Thursday, blowing through a longstanding level with ease. This explosive move higher after last week’s narrow consolidation zone confirms a trend shift. This is an upside technical breakout from the Flag chart pattern identified on Autochartist’s 240-minute time interval.

The swift rise in price throughout Wednesday’s session resulted in a close slightly above the breached level of 24.70 cents per pound. This put an artificial hold on the momentum reading, which may result in a strong opening on Thursday as momentum traders pile in. The minimum upside target from here remains at the 25.08 cents per pound price, with the upper end of 25.50 also possible. A rapid approach to these key levels would encourage long term traders to consider this as as the beginning of another leg in the major sugar bull market, with an eventual return to trade above 30 cents again.

Weakness at the current breakout level in the short term may signal more sideways action at the top end of the flag is needed to draw in more buyers. Alternatively, a sell-off below 23.95 support would likely trigger stop-losses, confirming a pattern failure and a bearish trend reversal.