Coffee Futures---Coffee futures in the December contract is trading higher for the 4th consecutive session hitting a 6 week high as I have been recommending a bullish position from around the 101 level and if you took that trade place the stop loss under the 14-year low which stands at the August 20th low of 93.40 as an exit strategy.
The recent rally is based on Somar Meteorologia stating that most arabica-coffee crops in the Cerrado region of Minas Gerais, the biggest arabica coffee growing region in Brazil have not had significant rain in 3 months and that temperatures have been above average which has stressed crops.
Coffee prices are trading above their 20 and 100 day moving average for the 1st time in months with the next major level of resistance all the way at the 110 level, however the chart structure will not improve for another 7 trading sessions so you will have to accept the monetary risk at this time.
Volatility is starting to increase which is a good thing to see as historically speaking this commodity can have tremendous price swings on a daily basis and I think that situation is going to occur once again as prices continually bounced off the 95 level as it certainly looks to me that a bottom is in place.
CHART STRUCTURE: EXCELLENT
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