Coffee At A Crossroads As It Hits Long-Term Support (BJO)

coffee prices

From Chris Kimble: Coffee hasn’t been perking well over the past 2-years, as it has declined nearly 40%.

This sizeable decline has it testing the 2007, 2008 and 2013 lows, where rallies happened to get started. The current price is also testing the 23% Fibonacci retracement level at (1).

In the mid-1990’s when Coffee fell sharply and hit its 23% retracement level, a strong rally took place. Coffee is now testing the 1995 support/23% level currently as well at (1). Understandably the decline has bullish sentiment towards Coffee very low. (17% Bulls).

The trend remains down for Coffee. It finds itself at a price point where a short-term counter-trend rally could take place. If Coffee continues weak and breaks support at (1), aggressive traders would want to use the support break as a new price point to short it.

The iPath Bloomberg Coffee Subindex Total Return SM Index ETN (BJO) was unchanged in premarket trading Tuesday. Year-to-date, BJO has declined -12.14%, versus a 5.42% rise in the benchmark S&P 500 index during the same period.

BJO currently has an ETF Daily News SMART Grade of NR (Not Rated), and is unranked among 113 ETFs in the Commodity ETFs category.

This article is brought to you courtesy of Kimble Charting Solutions.