Bears Have the Advantage as Arabica Coffee Falls. Here Are the Levels to Watch Before You Sell.
See on the daily bar chart for December ICE arabica coffee futures that prices are in a downtrend and last week hit an eight-month low. Prices have since seen a routine corrective bounce in the downtrend. Bears still have the overall near-term technical advantage.
Coffee Prices Fall Back After Monday's Surge
Coffee Prices Fall Back After Monday's Surge
How About those Crop Condition Numbers for Corn and Soybeans?
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Fundamentally, coffee futures prices have been pressured in recent months by a likely increase in global coffee production amid favorable weather conditions in key growing regions of the world —especially beneficial rains in leading coffee producer Brazil.
A move in December coffee futures below chart support at 285.00 cents would give the bears fresh power and it would also become a selling opportunity. The downside price objective would be 235.00 cents or below. Technical resistance, for which to place a protective buy stop just above, is located at 310.00 cents.
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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