NY sugar to rise to 36.08 cents

SINGAPORE: New York sugar would rise to 36.08 cents per lb over the next three months as a long-term uptrend could have resumed.

The uptrend originated from the May 1999 low of 4.36 cents, and has developed into an "A-B-C" wave cycle that has lasted for over a decade.

The trend seems still intact even following the recent deep fall from the February high at 36.08 cents.

Firstly, the speed and momentum of the recovery from the May low of 20.40 cents looks more like a resumption of the preceding bull trend, than a pure rebound.

Secondly, the construction of the wave "A" follows a 200 percent Fibonacci ratio as the wave "c" peaked around 19.11 cents, the 200 percent Fibonacci projection level, based on the length of the wave "a".

This ratio could be similarly applied to the wave "C", which has followed other Fibonacci ratios closely, such as the 138.2 percent and the 161.8 percent, representing the 29.57 cents and 33.20 cents levels respectively.

Support is at 24 cents, a fall below which would complicate the technical picture and the bullish outlook will be temporarily aborted.

Wang Tao is a Reuters market analyst for commodities and energy technical. The views expressed are his own.

No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.

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