Stay Long CoffeeCoffee futures in the March contract is trading higher by another 205 points at 137.25 or 1.52%.
The trading session continuing its bullish momentum as this market looks to head higher in my opinion as the volatility should increase tremendously in the coming weeks ahead.
As I have talked about in previous blogs I am currently not involved, however I certainly believe that higher Coffee prices are ahead as the drought in the country of Brazil which is the largest producer in the world continues to accelerate as I think the next level is 150 which could happen in the next couple of days as the volatility looks to explode to the upside in my opinion.
If you are long a futures contract I would continue to place the stop loss under the 10-day low as an exit strategy which currently stands at 117.95 as the chart structure will start to improve on a daily basis, therefore, lowering the monetary risk.
The Brazilian Real hit a 1 month high against the U.S dollar as that is also a supportive fundamental factor, but weather conditions in the country of Brazil is the main factor to dictate short-term price action as this looks like the situation that occurred in 2014 when prices almost doubled in a matter of weeks could be happening again so stay long as I see no reason to be short.
CHART STRUCTURE: IMPROVING
This article was written by Michael Seery (CTA—COMMODITY TRADING ADVISOR) www.seeryfutures.com