Tuesday, February 5, 2013

JO Coffee Weekly and Daily Charts Falling Wedge Positive Divergence


JO is coffee, another witty ETF acronym (a cup of jo). The weekly chart shows the top in springtime 2011, and downhill ever since, falling from 80 to 32 almost 60%. There's dust on those coffee beans. But, as always, time marches on and the selling becomes overdone. The weekly chart positive divergence is content with calling this area as a bottom for JO.Buying interest showed up a couple weeks ago perhaps some hedge funds are starting to sniff around JO for a good cup of coffee.

 The daily chart is also positively diverged although the short red lines do indicate some near term weakness. The 20 MA moving above the 50 MA is bullish (yellow circle). Note a couple days of capitulatory selling in December. As JO bounced, those folks disgusted with holding JO since the Fall said 'get me the H*ll out!' and made a run for it giving up on JO. Those large sell days indicate a bottoming, typically right where the turn up occurs, as the last of the long holders give up and throw in the towel. JO is reminiscent of natty gas last year (UNG). It bottomed in the springtime last year and turned out to be a darling thru the summer into the fall by long traders. JO is set up similarly so perhaps coffee will become a darling for 2013.  Projection is for  a basing right now and bounce and sideways to sideways up for the days, weeks, and months ahead. 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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5 comments:

  1. MCAPFebruary 5, 2013 at 3:14 PM

    I was bid on this - this morning at 32.32 and when they refused me shares I pulled it when it was trading at 32.47. I'm fishing for shares under 32.10 maybe tommorow then it will get interesting...

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    1. Keystone SpeculatorFebruary 5, 2013 at 3:58 PM

      The 32.20 is important since failure of 32 may have to lead to 28 due to the 80/20 rule. It looks like it should hold now but in these markets, anything can happen. Sitting back and will use a wide scale-in to add. Coffee may turn out to be the commodity darling this year like UNG turned out to be last year.

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  2. MCAPFebruary 5, 2013 at 3:32 PM

    got filled on MHP at 43.94 that was a good trade there for about 4 seconds then it whoosh to 43.33 momo baby don't fight it... I drew a trendline under the 2 30min lows today to get to that price and now it put in a reversal candle on the 2min chart so lets see if the algos take it back to 45 and I'll be out there.

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    1. Keystone SpeculatorFebruary 5, 2013 at 4:00 PM

      Whoa, wild flush move. It formed positive divergence on the minute charts and popped, buying volume coming in. That's a heck of a wild ride.

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  3. MCAPFebruary 5, 2013 at 3:59 PM

    there was a nice reversal candle on the 30min chart I see on JO so lets see if they will be generious and sell me shares at 32.34 I'm bid there now and bid which will automatically cancel at 6PM

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