I will be recommending a bullish position if prices close above 105.30 while then placing the stop loss under the contract low which was touched on September 18th at 98.55 as the risk would be around $2,600 plus slippage and commission.
The chart structure currently is outstanding due to the extremely low volatility as there are now some concerns about growing conditions in the country of Brazil as pockets of dryness have come about and if that situation accelerates volatility will climb to the upside as well as the price.
Coffee experienced a drought in 2014 sending prices dramatically high in just a matter of weeks and that occurred in the month of February as I want to play this to the upside.
Coffee is now trading above its 20 day, but still below its 100 day moving average which now stands at the 109 level. If you take a look at the daily chart prices tested the 98.50 level on over a half a dozen occasions only to rally every single time as I do think there's a high probability that prices have finally bottomed out.
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