Coffee has gone to the sky since the beginning of february, almost 100%. After such explosions, corrections are good places to go with the trend. Of course, I don't know if Coffee will continue up, nobody knows, but a bet now is very attractive, as coffee returned to value (EMAs). I noticed that during strong uptrends, small double bottoms are perfect places to get in, and usually the price blows through the roof, the double bottom acting like a deck.
If we take a look at volume bars, it's visible how the downtrend ended with a sharp rise in volume. When coffee prices exploded, volume exploded too. Now look at the last two corrective weeks, the volume is very light. Those long positions are not liquidated, and this looks like a correction. The only worry I have, is the light volume the day of the breakout (this friday).
The Force Index, which uses volume, has reached historic highs. I looked back 15 years, and the highest value I found was 3 times smaller than the value seen at the middle of february.
I can't actually trade this chart, because the cfd my broker offers is huge, as I have a small trading account. There's no way I can trade this without risking way too much of my portofolio. If I were to trade, I would definately be looking to add to my position at every small correction.
If my interpretation is right, I believe we are going to see this chart way over 200$. If, however, I will see coffee stalling at last swing high, I will reases my bullish bias. As I said, this double bottoms usually explode, and I will be looking for a AB=CD pattern, with targets around 300$, rather than a double top at 210. There's no way to tell which one it's gonna be.
If we take a look at volume bars, it's visible how the downtrend ended with a sharp rise in volume. When coffee prices exploded, volume exploded too. Now look at the last two corrective weeks, the volume is very light. Those long positions are not liquidated, and this looks like a correction. The only worry I have, is the light volume the day of the breakout (this friday).
The Force Index, which uses volume, has reached historic highs. I looked back 15 years, and the highest value I found was 3 times smaller than the value seen at the middle of february.
I can't actually trade this chart, because the cfd my broker offers is huge, as I have a small trading account. There's no way I can trade this without risking way too much of my portofolio. If I were to trade, I would definately be looking to add to my position at every small correction.
If my interpretation is right, I believe we are going to see this chart way over 200$. If, however, I will see coffee stalling at last swing high, I will reases my bullish bias. As I said, this double bottoms usually explode, and I will be looking for a AB=CD pattern, with targets around 300$, rather than a double top at 210. There's no way to tell which one it's gonna be.
