wmeubank@ocp.kcmo.com
COMMODITY REVIEW AND OUTLOOK
195 Route 6A, Suite 6, Orleans, Massachusetts
(November 25, 1997) SUGAR: SHORT TERM–Producer buying near 1200 and selling near 1216 were the primary features of the sugar market. There are mixed stories on India's need for sugar, with some signs that they have been in the market being accompanied by denials. Time will tell. Brazil has been a seller on the market, with Russia an ongoing buyer due to problems with their crop. Russia is thought to have the worst crop in thirty years. El Nino may be a factor later in the year, but so far its effects have been scattered and not severe. This will be a thinly traded week.
RESISTANCE–Basis Mar. and the weekly charts lies near 1216-1220, 1245-1250 and 1285.
SUPPORT–Basis Mar. lies near 1200, in the mid-1190's, mid-1180's, 1170's, 1163.
RECOMMENDATION–Aggressive traders might buy Mar. sugar on this dip to the 1200 area. Use stops under 1163 or of 30-50 points. If you're more conservative, consider holding out for a break to the 1180's. If you're a breakout trader or are looking for a place to add positions, consider buying a penetration of 1244. Look for the low 1270's. Getting through the upper teens, lower 1220's may be difficult for now, so don't be surprised to see selling emerge in that area. Action after last week's break has been positive, but has not confirmed anything. The long-term objective is open, but new highs, perhaps by a substantial margin are expected. This could be one of the best option trades on the board.
Option traders should buy Mar. or May 1200 at current levels. Experienced traders could consider calendar spreads. Buy the May and sell Jan. or Mar. calls to pay for the time premium.
M. Steven Morgan
|
|
Hosted by:
One Crossroads Place
610 West Maple Ave, Suite WWW
Independence, MO 64050
(816) 252-4080
sysop@kcmo.com