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