Coffee C futures (symbol: KC) have rallied from the $1.0095/lb support level on 07Nov13 to $1.7570/lb as of 20Feb14 in an impulsive manner, with higher volatility and strong volume.
Recall our 12Feb14 article ‘Coffee Rally to Test $1.50 Level’ (http://murphycofutures.com/coffee-rally-to-test-1-50-level/) “….. trend reversal can only be confirmed with trade above a) the resistance at the $1.50 level and b) the downtrend line originating from the May11 peak which currently lies above the $1.60 level”. Both conditions have been met.
While the next major resistance resides at the $1.9085 level, we expect some backtesting of the major downtrend line originating from the May11 high. However, be alert as the impulsiveness demonstrated within the last several weeks can be extremely powerful.
Murphy & Co’s Coffee model is currently long. To learn more about Murphy & Co’s position models, visit http://murphycofutures.com/position-models/.