Since the January 24 high coffee has had three waves down on its daily chart. This week it reached its previous December lows and has been consolidating since. Forming a reversal bottom on Monday helped too. And it appears the weekly chart will be forming one too, assuming it holds its current gains. And it is holding at support on its monthly chart. For a possible approach see Trade Alert below.
TRADE SUGGESTIONS: All trades suggested are for the day session only, do not enter trades for the night session.
Buy May coffee. Buy 140.35 stop. Protective stop 137.50. Potential projection 144.00. (Potential risk $1068.75. Potential reward $1368.75). Margin: $3630.
Reasons for the Trade:
1. On the monthly chart coffee is holding in support.
2. On the weekly chart coffee is holding in support and forming a preliminary reversal bottom to the recent selloff - suggesting an attempt to change trend from down to up.
3. The daily chart formed a reversal bottom on Monday suggesting a near term trend change from down to up.
4. On the daily chart the macd is turning up.
5. Today was an inside day that can trigger a signal and market direction.