Are Coffee Prices Primed For A Reversal Higher?

Chris Kimble

Aside from the energy space, commodities have had trouble getting going.

In particular, Coffee prices have taken it on the chin. But something good may be brewing in coffee land.

Coffee is in a long-term downtrend but it’s short-term “trading” picture may be brightening.

In the chart below, you can see that coffee prices trying to revers course at 10 year lateral support at (1). This reversal also has coffee breaking out of a steep bullish falling wedge at (2).

The potential for a trading bottom is further supported by Coffee’s lowest momentum reading in 5 years at (3).

Past rallies have come from similar momentum readings.

Coffee Chart

coffee prices bottom chart support october 2018

One last nugget of support for Coffee comes by way of coffee hedging positions (via SentimenTrader). Based on past history, when traders are positioned like this it’s been closer to lows than highs.

coffee futures hedgers positioning price bottom chart_sentimentrader

 

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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.

 

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