Coffee Futures--- Coffee futures in the December contract settled last Friday in New York at 125.25 while currently trading at 125.50 up slightly for the trading week holding major support at the 123 level as I'm itching for a bullish position in this market as I think the commodities are starting to bottom out despite the fact that the U.S dollar continues to hit multi-month highs but is having little impact on prices at this time.
The weather phenomenon known as La Nia is starting to occur & could have a dramatic impact on the country of Brazil as there are certain pockets of coffee growing regions that need rain at the present time, however its very early to say that there is any type of drought like what developed in 2014 when coffee prices exploded to start the new year due to lack of rain.
A double bottom may have occurred on the daily chart as prices are unable to break the 123 level in my opinion despite the fact that prices are still trading right at their 20 day, but below their 100 day moving average as the chart structure is improving, but it is still poor at the present time as it will take more time before I enter into a bullish position as the risk/reward is not in your favor.
If you are bullish coffee and think prices have bottomed out place the stop loss at the contract low of 119 risking around 700 points or $3,000 per contract plus slippage & commission as coffee is the largest contract in the world with huge risk and huge potential as well.TREND: MIXEDCHART STRUCTURE: POOR---IMPROVING
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