Trading portfolio Today

MARKETSFORU

Sugar – buy at market

Stop loss: 9.30 

Take profit: 14.00

Justification:

while oil and copper attracted lots of attention as their prices kept plummeting, other commodities, including soft's, suffered lengthy price declines as well. Sugar prices are certainly in that group, declining  steadily since the mid’11. Price declines were helped by both large supplies and depreciation of emerging market currencies which often made farmers happy even with lower USD prices. However, we are at the point where prices are already very low and any supply-side disturbance can cause a major rally. Technically, we can notice a nearly completed weekly outside bar just above a lower limit in a downward channel which is a bullish signal. Finally, speculative positions are still deep on the short side so again, anything positive could quickly cause a turnaround on this market.

 

OIL.WTI – sell limit at 45.50

Stop loss: 48.00 

Take profit: 40.00

Justification:

oil prices rebounded sharply yesterday following what it looked like a never-ending plummet. This is mostly a sentiment driven recovery – declines over the last week were motivated more by a demand side (possibly lower demand from China) rather than a supply side. When it comes to the supply, US inventories declined quite notably but to a significant extent it was a result of lower imports. While oil was heavily oversold, we also are skeptical about a rapid price recovery. Should prices reach 45.50 within the next week, we would see it as a short opportunity.