In keeping with my theme of using strategic & tactical asset allocation in order to not just survive but rather prosper from the next (current) bear market, SGG (sugar ETN) will be added as an official Long Swing Trade as well as a Long-term (trend) Trade Idea around current levels.
SGG daily April 2nd
The current price targets for this trade are T1 at 37.00 & T2 at 47.00 although both targets are subject to revision based on how sugar futures (/SB and $SUGAR, charts below) are trading if & when SGG starts to approach those levels. The suggested stop is 30.65 although those only targeting T1 might consider a tighter stop. The suggested beta-adjusted position size for this trade is 1.0 (a typical position size). As I don’t see this as a “hard entry”, rather a soft entry based on the analysis above & below, longer-term swing & trend traders might also opt to start scaling into a long-term position in sugar around current levels.
$SUGAR weekly April 2nd
Zooming out to the weekly charts for the bigger picture, $SUGAR (stockcharts.com ticker for coffee futures, end-of-day prices only) has made yet another pullback to the 0.10ish key support level with the positive divergences that were in place the last time sugar was highlighted as an objective long entry on a drop to this level back in early August of 2018 (which was then followed by a 55% rally). The only difference this time around is that those same divergences have continued to build, thereby indicating the potential for a much larger bull market/rally, should they play out for another trend reversal once again going forward. While a favor a reversal from at or near current levels, I am very much open to the possibility of a relatively brief “stop-clearing” drop below this support level followed by a snap back above. If so, that would only serve to extend the existing divergences & set the stage for a potential bear trap & short-covering rally.
SB 60m April 2nd
Zooming down to the 60-minute chart of /SB (sugar futures, real-time chart), /SB sugar would have a buy signal pending a breakout above the minor downtrend line/wedge with a second buy signal/objective long entry to come on a break above the second trendline & intersecting 0.1073 resistance level although a case could be made for an aggressive long entry here in anticipation of what appears to be a likely & imminent breakout. Any breakouts above those levels would also provide objective add-ons to a starter position taken here and/or on a brief dip below the long-term support level on the weekly chart.