Thursday, March 3, 2016

JO Coffee ETN Weekly Chart oversold Falling Wedge Positive Divergence Lower Band Violation Mean Reversion

Keystone mentioned coffee as a long play previously; it may be one of the few places to hide once the broad market selling resumes. Keystone has been building a long position in JO, added more on Wednesday. This is an extremely dangerous knife-catch that may cut your hand off if it keeps falling, however, the technicals are attractive for a long trade as a speculative trade.

Price tagged the lower standard deviation band so a move back to the middle band, at 18.68, is in play and also a potential move to the top band at 20.14. Price is below the moving averages so a mean reversion is needed (higher prices). The green lines show the falling wedge pattern and positive divergence across all indicators more bullishness.

Since JO is severely beaten-down it should weather the storm even if stocks continue dropping. Keystone is sitting on sacks of coffee beans out in the garage looking forward to higher prices as the days and weeks play out. 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.

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