May 25, 2019
Last week, the price of coffee futures on the ICE put in a bullish reversal on the weekly chart.
Coffee fell to a lower low than the prior week and closed over the previous week’s high on increased volume last week. We saw this pattern during the week of September 17 which led to a rally from just over $1 to $1.255 per pound by mid-October. Coffee at under $1 per pound is inexpensive and near the bottom of its pricing cycle. The technical action last week could mean a significant price recovery is on the horizon. I favor calls or futures positions on the long side of the market or a long position in the JO ETN product as risk-reward favors the upside.