Market Bottom Alert: Are FCOJ Prices Set to Gain Here?
See on the daily bar chart for September frozen concentrated orange juice (FCOJ) futures that prices have rebounded smartly after challenging major, long-term technical support at the $2.0000 area. Three sessions in a row of good price gains have given the bulls upside momentum. It's my bias that the FCOJ market has put in at least a near-term price bottom and that prices will trend sideways to higher in the coming weeks.
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Fundamentally, FCOJ prices are being supported by a global orange shortage due to disease and poor growing weather. Citrus greening disease has hit Florida and Brazil in recent years. Extreme weather, namely hurricanes and droughts, have further reduced global orange production.
A move in September FCOJ futures prices above chart resistance at $2.5000 would give the bulls more power and it would also become a buying opportunity. The upside price objective would be $3.2500, or above. Technical support, for which to place a protective sell stop just below, is located at $2.1500.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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