Grab a Cup of Coffee, or a Whole Pot its Getting Cheaper
- Posted by Greg Harmon
- on November 8th, 2012
Coffee ($KC_F, $JO) prices are continuing to fall since peaking in early 2011. From the monthly chart below you can see it was a Double Top created with the prior top in 1997. Since the pullback has begun it has retraced almost 61.8% of the 9 year move higher, a key Fibonacci level, with the 100 month Simple Moving Average (SMA) at nearly the same level. This creates a tradeable event and makes it interesting. A continued move below the 1.44 level has support next below the 200
month SMA currently at 1.21, down at 1.10. And with the Relative Strength Index (RSI) making new lows and into bearish territory and a negative Moving Average Convergence Divergence indicator (MACD) there is support for more downside. The shorter weekly view suggests that you might not have to wait for the 1.44 break. this chart shows a double bottom at 1.51, that if broken could get the trade started early. Even if you do not trade commodities this can be useful. The price of coffee tends to be inversely correlated to the price of coffee stocks. Look for potential long trade ideas with them.
Join the Dragonfly Capital Views Premium Membership
Sign up here to get deeper analysis and nearly 50 trade ideas every week.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
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)
Dragonfly Capital Updates
- Premium Earnings 5-22-13
- The Coffee is Still Percolating
- ♫ McDonald’s is My Kind of Place … ♫
- Premium Earnings 5-21-13
- Checking the Gold to Oil Ratio
- Jumping into the Big Oil Gush
- New Website Tab – SPY Sentiment
- Premium Earnings 5-20-13
- Top Trade Ideas for the Week of May 20, 2013: Bonus Idea
- Top Trade Ideas for the Week of May 20, 2013: The Rest