Coffee Eyes Short-Covering Rally
Chris Kimble | Jul 13, 2017 10:13AM ET
Coffee has been rather cold the past few years, as Coffee ETF (NYSE:JO) has declined from $80 back in 2011 to $15 of late. This decline has created an interesting setup, driving away most bullish coffee investors.
Below looks at the ETF and the pattern it has been making the past few years.
No doubt, the trend in coffee is down at this time. As mentioned above, JO looks to have hit support of a bullish falling wedge at (1), where it created a rather large bullish wick (reversal pattern) a couple of weeks ago. A small counter-trend rally has taken place the past couple of weeks and now JO is testing resistance of the bullish falling wedge at (2).
If coffee breaks out, it could create a short-covering rally as traders have amassed the most lopsided/crowed trade in the history of coffee futures.
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