Coffee has been anything but hot over the past 3-years, as it has declined nearly 50%. Is cold Coffee about to heat up? Possible in the short-term!
This chart looks at Coffee futures over the past 16 years. The 50% decline is coffee has it testing its 2005 lows and the bottom of a 3-year falling channel at (1).
While testing this support zone two weeks ago at (1), it created a bullish reversal pattern (bullish wick).
No doubt the trend in Coffee is down and this one-week bullish reversal pattern does NOT change the trend!
If Coffee can break above resistance at (2), look for it to heat up in the short-term.
Currently, hedgers have a very big bet in play that Coffee will rally. Keep a close eye on Coffee and Coffee ETF JO over the next couple of weeks, as an upside bullish breakout test is in play.
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