Coffee futures in the May contract settled higher for the 2nd consecutive session settling right near a 2 week high up 195 points at 123.95 a pound as it looks to me that prices bottomed out around the 11850 level in last weeks trade.
At the current time my only soft commodity recommendation is in cocoa which continues to move higher on a daily basis & if you have been following any of my previous blogs you understand that I think coffee prices are incredibly cheap as I will be looking at a bullish position if prices break the 126.50 level on a closing basis which could happen in tomorrow’s trade.
Coffee is trading above their 20 day but still below their 100 day moving average which also stands at critical resistance at the 127.10 level as I think all of the bad fundamental such as a huge crop coming out of Brazil has already been reflected into the price.
The volatility in coffee remains extremely low and I don’t think that’s going to last much more for this sleeping giant because when the volatility finally does come to fruition lookout to the upside as I will not take a short position as the path of least resistance will be higher in my opinion.
TREND: MIXED
CHART STRUCTURE: SOLID
VOLATILITY: LOW
