Is Coffee Ready to Start Percolating Again?

• Posted by Greg Harmon
• on March 21st, 2012

A month ago when we last looked at coffee it was about to to fall off a cliff. That turned out to be right (link below). But now there are signs from the daily chart that it may be bottoming. Could it be so? The chart below shows the break down below the long trend line support earlier this month. But notice that the slope of the fall is declining. Also the Relative Strength Index (RSI) has moved to oversold and is working that condition off already. And the Moving Average Convergence

Divergence (MACD) indicator is improving back toward zero. Things are looking up! But recall that the RSI can work off an oversold condition by just moving sideways. This could just be the building of another bear flag before the next run lower. What does the longer monthly chart suggest? Well the chart below, with 8 days left, only looks worse than it did one month ago. A date with the bottom rail support at 1.68 looks likely and could happen this month. Remember that this is also the high levels from 2008 so maybe it will stop there. But the RSI falling hard and the MACD quickly growing

more negative certainly do not have me ready to look for a bottom. Do not let the daily chart fool you. Step back to look for confirmation. You might save yourself enough money to buy a Venti Latte at Starbucks.

The Decaf Market for Coffee

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