Friday, July 26, 2013

Is this a buy signal in coffee? JO

Our trading partner Jim Robinson of is talking coffee today and he is sharing his expert analysis of charts to our readers. Each week he'll be be analyzing a different chart using our Trade Triangle technology and his experience. Today he is going to take a look at the technical picture of Coffee, contract (NYBOT_KC.Z13.E). Here at The Crude Oil Trader we are using ticker JO for our current coffee trades.

This week let's take a look at the December Coffee futures chart.

We use the weekly MarketClub Trade Triangle to tell the trend when trading futures and the daily MarketClub Trade Triangle to time the trade. December Coffee is on a weekly green MarketClub Trade Triangle and a daily red MarketClub Trade Triangle which is just exactly the way we want the Triangles to line up for a buy setup.

If December Coffee trades higher from here and puts in a daily green MarketClub Trade Triangle that is the place to go long because the weekly and daily Trade Triangles will then both be pointing up. If a long trade does happen in Coffee, then the stop if wrong is if Coffee trades lower and puts in a red daily Trade Triangle.

This is a great way to trade because we are getting long with the trend and will catch all the big trending moves when they happen, while cutting our loses short if the trade doesn't move our way. If Coffee continues lower from here and puts in a red weekly Trade Triangle then the long trade is off, which is fine, as we are following what the market is telling us, and lower prices from here would cancel the current long trade setup.

Coffee is a Chart to Watch right now, because a big move higher from here could be about to happen.

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1 comment:

Ray @ The Crude Oil Trader said...

Mike Seerys Friday call..

Coffee futures settled down 230 points this Friday afternoon while still trading above its 20 day moving average but below its 100 day settling last Friday at 122.70 a pound basically trading unchanged for the week with excellent chart structure on the daily charts. I have been advising traders to be bullish or long the coffee market with either bull call spreads or outright futures and if your trading outright futures my advice would be to place your stop at the 10 day low which is 118.65 which was hit on July 15th minimizing your risk in case the trend does continue to the downside. Coffee prices are still right near a 3 year lows and I think with a sideways consolidation that we’ve had in the last 6 weeks looking to bottom especially with the U.S dollar hitting a 5 week low today which could be supportive coffee prices. All of the bad news in coffee is basically baked into the prices such as a large harvest from Brazil & waning demand worldwide so I think the tide might be turning to the upside in my opinion. TREND: LOWER –CHART STRUCTURE: EXCELLENT