Friday, August 14, 2009
Sweet ! Sweet !! .... ahh... Too Sweet !!!
We am talking Sugar folks.....
Sugar has seen a parabolic rise this week. The media is gung ho with articles that this is the perfect setup for Sugar to go higher - below average rains in India, while Brazil seems maxed out on capacity.... Seems to be the perfect setup for higher prices..... and roping the crowd into the Long Sugar trade....A hedge fund manager, Michael Coleman was quoted Bloomberg - Sugar may climb 80 percent to as high as 40 cents a pound on global supply shortages.
We think its a perfect setup to take profits in Sugar if you were already long..... Else go short on Sugar Futures.... We think Sugar has seen the top and its time to take profits and move on to another table..... and seek a better risk-reward....
Short SGG - Sugar ETN - @ 66.25, Stop @ 67.50
Buy Put Options - IPSU - Imperial Sugar - with $10 Strike, Sept09
We'll review this trade in the next few days....