JO Coffee Weekly Chart Oversold Falling Wedge Positive Divergence

Coffee is a long term fave commodity. As Keystone has mentioned, coffee is similar in behavior to natty gas about 12 to 18 months ago as it placed a multi-month bottom. The ag sector is seeing strong yields which drive prices lower this year. Corn was scarce a couple years ago but this year the corn ears are up to our human ears. As shown on the DBA chart, the ag commodities have been beaten down and charts are now set up for the upside. The JO daily chart bounced from the positive divergence and its indicators show long and strong behavior moving forward. The weekly chart shows oversold conditions, a falling wedge and positive divergence which says the worst is over, and a bounce is on tap, for this commodity that fuels millions of people each morning.

If the broad markets sell off again, the current highs in equities may not be seen for 3 to 5 years. This situation limits the number of stocks that are attractive from a long term buy and hold perspective (LTBH). Coffee is one of the few areas that offer a nice LTBH trade which is especially attractive for traders that do not want to fool around with the day to day market machinations and instead would rather play the weekly and monthly intermediate time frame. Projection is for a base to hold here for JO with price moving sideways to sideways up for the weeks and months forward. A reasonable expectation is for price to recover to 28-30 perhaps by the end of the summer. Keystone is holding a long position in JO. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.