July ICE coffee futures (KCN25) present a buying opportunity on more price strength.
You can see on the daily bar chart for July ICE coffee futures that after prices hit a record high in February, trading action has since been sideways and choppy. This price action has produced a bullish symmetrical triangle pattern on the daily bar chart. Also, you can see at the bottom of the chart that the moving average convergence divergence (MACD) indicator has recently produced a bullish line crossover signal.
Fundamentally, adverse weather conditions in several major coffee-producing nations of the world have cut into global supplies. This comes at a time when global demand for coffee is on the rise. Concerns regarding political stability and distribution from the major coffee-growing countries are also a price-bullish element for coffee futures.
A move in July ICE arabica coffee futures above chart resistance at this week’s high of 395.55 cents would become a buying opportunity. The upside price objective would be 450.00 cents, or above. Technical support, for which to place a protective sell stop just below, is located at 367.50 cents.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
