Fundamentals Win Out Over Technicals On Sugar….For Now

I get a lot of calls every day on my radio show about sugar.  It’s been one of the commodities I’ve owned specifically over the past few months.  Just recently, I sold my holdings in it to lock in profits and see if I could re-enter the trade at lower prices.  This was in direct conflict with the fundamentals which continue to improve and give investors no reason to sell.

As you can see from the picture below, sugar (using the ETN SGG) has been in a down trend for a couple of months.

sugar prices 10 19 09
We’ve had two sharp sell offs in the past few months but both were opportunities to buy the shares cheaper and the ETN rallied soon after.

So far, the fundamentals have won out.  Keeping it based on the fundamentals (rising sugar prices for supply/demand reasons) has been the right move.

If you aren’t in sugar right now and sitting in cash (as I am), you have to at least wait now until the downtrend changes.  We’ll know the answer to this very soon as we’re now back at the top of the range.  I’m patient in watching to see if there’s  a better entry point.

Strong fundamentals sometimes trump any technicals and we certainly have that happening right now in sugar.


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October 2009
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