The orange juice futures market rolled into an intermediate-term downtrend on its weekly charts in mid December.
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Since then, the July futures contract has lost nearly 50% of its value.
Commodity Bulletin: From crude oil to coffee, this FREE newsletter is for industry pros and rookies alike However, heading into Friday's session the same July issue is in position to change direction.
As I was thumbing through a variety of charts Friday morning, I stumbled upon the July Orange Juice (OJN25) weekly. The OJ market has gotten some press lately from its free fall with the July issue losing $2.6305 per pound since posting its high of $5.02 the week of December 16. For those keeping track, that’s a loss in value of 48%.
Here’s where things get fun, though, from a technical point of view:
- Weekly stochastics are deep in single digits, indicating a sharply oversold market, and nearing the establishment of another bullish crossover below 20%
- Signaling a potential move to a secondary (intermediate-term) uptrend
- The initial crossover was on Friday, February 28
- The July issue posted a new contract low of $2.3895 this week before closing Thursday at $2.5850
- Last Friday’s settlement was also $2.5850
- If July orange juice closes higher for the week, it would complete a bullish spike reversal on its weekly chart
- Confirming a move to a new secondary uptrend
Fundamentally the market remains bullish, as indicated by the 1.3-cent inverse in the July-September futures spread.
I learned a long time ago one has to be brave, or crazy, to trade orange juice futures. Or possibly a little bit of both. Let’s see what happens Friday.
