Coffee C – Lower Expectations, Higher Prices.

coffee

Coffee C Fundamentals

Coffee has been trading in a tight range and it is possible that it might remain trading under pressure. It looks like a long and prolonged bottom. At least those are the expectations around in the open market.

  • The IMF has projected slower growth from emerging markets. Such projections will only dent demand for the commodity.
  • Supplies of Coffee C are expected to remain high especially as Colombia has reported an increase in production.

Technically

Coffee C has been in an extended downtrend with little fundamental sings for a reversal. Nevertheless, there seems to be an increase in the market sentiment. Perhaps, Coffee C could bounce back to around $1.20. This is essentially what traders want – to trade within volatile prices. There doesn’t have to be a rally because another rally is unlikely to happen in the short term.

The Long Upper Shadow

Was there anybody else wondering about the Long Upper Shadow that appeared on Thursday, 10 October 2013 in the daily chart ( of Coffee C). Long upper shadows are taken into consideration when appearing at resistance level. But with such proximity between resistance and support, it is difficult to put a value on a Long Upper Shadow.

So far as today, that bearish Long Upper Shadow can be forgotten; prices have been smiling upon the bulls.

Perhaps it was a bullish Long Upper Shadow warning that prices are too low. Perhaps the commodity has been oversold. In this instance it could be suggested that long positions are outnumbering short positions. In fact, it did look like that until today as today’s trading day ended with a bearish pattern.

Bearish Engulfing Candlestick Pattern

After another fistful day where prices swung heavily. The bearish are on top winning the last battle. The day ended with a bearish Engulfing Candlestick Pattern. This type of patterns usually signals a peak or slowdown of an uptrend. Making a rush decision will have to be considered in the coming days but with not peak or uptrend really in place, one can simply expect the worse.

Resistance & Support

Coffee C prices have done extremely well in recent days. It has converted $ 1.16 resistance into support level. It is a precious advancement and a huge step forward if prices are to go higher. We know that fundamentals have the upper hand so far.

The next expected resistance and profit target is from $1.18 to $1.20.

The support level remains fragile – just below $1.14. Note that prices are trending close to the higher pick. Any break below $1.14 could trigger another sell off.

Technical indicators are mixed and favouring the beginning of a new short uptrend.

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