A_Bouras

COFFEE - Possible "coffee break" ahead

ICEUS:KC1!   COFFEE C® FUTURES
Coffee is back around the price of the beginning of the month.

Since OCT 2 we have a shy uptrend forming for coffee’s standards, in the 4h time frame (TF).

The price went up from its lowest of the current month and $104.90 to $113.35 (+8.04%) on OCT 12 and $111.70 (+6.45%) today so far.

The trend on the Higher TFs is still bearish and technically this is where are now.

We have some indications suggesting that we might be in front of a total reversal for the price of Coffee .

There are:

1) Higher lows since OCT 2

2) at the 4h TF since OCT 9 from the 10 bars 8 of them are above the 50MA

3) we had two major tests (and rejections) for price to break above two week resistance

4) we expect the price to reach at some point soon the monthly Fib 0.382 level

Against the above are the latest data from the COT report of OCT 6 where hedge funds closed 3.207 positions and opened 4.219 bringing the Net Long positions to 47.505 from 54.931 the previous week. Of course we still don’t know what their positions are for the current week.

So what we make out of all this.

To put it in simple terms with what I know so far the longer the price remains above the 50MA the more the chances of it breaking the $112 and move towards the Fib 0.382. The “Decision lvl” is where the two weeks resistance meets the blue trendline. Break it and we buy.

If on the other hand price breaks below the green trend line and the 20MA then we might be looking for more to the down.

Good luck traders

Note: I'm no trading expert nor have the ambition to become one! The above is just an idea that I share with the intention of attracting comments and perhaps become a better trader.

Comments

grate what the latest analysis for Coffee
if you check in 1H there is good indication for 20MA and 50MA
did that will effect
+1 Reply
Great analysis, it seems like it made a fake out move yesterday to squeeze out all the remaining longs...

Nice recovery during last trading hours yesterday, it might resume the trend and break the purple line you call the Decision level
+1 Reply
A_Bouras noochboy
@noochboy, thank you, it means a lot to me.

Well pointed about the longs.

As we are approaching the closing date for the DEC 20 contract I also expect to break the Decision lvl.

In the meantime, I opened yesterday a couple of short positions which I gave up just a few minutes ago with 236pip profit which was nice.

Now I'm out of it for the weekend and be back on Monday considering new positions after I check the COT later today.
Reply
Nice analysis. Coffee is having a strong movement over last few days which is a continuatuation of the trend that you picked up on. Obviously supported by some fundamental factors given the winter season. This looks to have driven increased levels of volatility, however given the strength of the chart we could feasibly see this move back into high 120s/mid 130s. Interested in whether those on this thread agree/disagree with this view. Thanks!
Reply
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