Coffee futures have seen a nice rally higher. And although the wave formation is bullish, the rally may be ready for a pullback.
A couple weeks back I wrote about why coffee futures are setting up for a nice rally. Here’s an excerpt:
Based on the big gap up last week and the fact that a “lot” of math and geometry are pointing to the recent lows as important, it’s fair to assume that coffee is off on a move higher.
Looking at the chart below, we can see a very symmetrical and balanced form/proportion move from the lows in and around 114.57. I’m going to label the current price action as the end of a 5 wave movement so I would expect weakness ahead for coffee prices.
Since this is the first 5 wave move up, the pullback could be substantial but in no case should Coffee futures go below 114.57. If we get a nice pattern to BUY then coffee futures should really rip higher in a 3rd wave and start a much longer, more sustained rally leg.
Again, the key is holding above 114.57 on the pullback. click chart to enlarge
Coffee Prices – Futures Daily Chart
Thanks for reading.
Twitter: @BartsCharts
Author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
