Coffee Choices: Cafeinated or Decaf?
- Posted by Greg Harmon
- on July 24th, 2012
Coffee, $KC_F, is at an important juncture after finding a bottom at the 1.50 level. The weekly chart below shows a move straight higher after that Tweezers bottom, and a substantially oversold RSI. With the RSI now flirting with the mid line and closing in on a turn to bullish and the MACD rising supporting further price action to the upside, we find price retesting a critical level. It is at the 61.8% Fibonacci retracement level of the long move higher into early 2011. Between this level at 1.88 and the rising 200 week SMA at 1.74 was a critical area on the move lower as it consolidated there for 10 weeks. Now back-testing it from below, presents a trade opportunity either to the downside on a failure or to the upside on a break higher. A Measured Move lower takes it well below a full retracement at 1.13. And a break higher sees 2.11 as the next target. Even if you do not trade Coffee this can be important. Starbucks, $SBUX reports Thursday night. A prolonged rise in Coffee prices will impact their earnigns and other Coffee companies like Caribou, $CBOU, Java Holdings, $JVA and maybe Green Mountain, $GMCR. Think you do not need to care about Coffee prices, think again.
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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
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