Coffee May Be Perking Up
- Posted by Greg Harmon
- on January 15th, 2013
From a purely technical perspective there are signs that the bottom in coffee ($KC_F, $JO) may be in. The daily chart below is where the signs first show up. The three rounded bottoms, in the price, Relative Strength Index (RSI) and Moving Average Convergence Divergence indicator (MACD) all are giving a buy signal. It is a cautious buy as the price has been above the 20 and 50 day Simple
Moving Averages (SMA) in the past (look to July and October) before starting the next leg down. A move up over 1.59 would give it some strength and then over the 200 day SMA would likely get many bullish as it has not maintained above that indicator since September 2011. A starter position seems right. Moving out to the weekly chart shows that the latest bounce is happening at the 78.6% retracement of the major run higher from 2008 through 2011. This support is also resistance from late 2009 into 2010. If it were going to reverse somewhere this is a natural place to happen.
The RSI and MACD are supportive of upside here too, but all of the SMA are above the price and pointing lower. This picture also says be biased higher but be cautious. There is a lot more to be said about the possible bottom but my friend JC Parets (@AllStarCharts) said a lot of it yesterday. You can read his thoughts on it here.
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)
- SPY Trends and Influencers March 28, 2015
- Macro Week in Review/Preview March 27, 2015
- Trading the Ratio of Oil Servicers to Oil
- Trading 3 Black Crows, A Hammer and On Semiconductor
- Premium Earnings 3-26-15
- Crabs and Sharks in the Gold Chart: Update
- Designing a Spring portfolio improvement trade in Home Depot
- Premium Earnings 3-25-15
- First is the Worst, Second is the Best….
- Container Ship Stocks are Sailing Higher