Coffee C futures (symbol: KC) has rallied from the $1.0095/lb support level (07Nov13) to $1.4415/lb as of 06Feb14. Quite a nice rally in percentage terms (42% in three months).
The rally has occurred in the midst of strong volumes and increasing volatility, both signs of trend reversal. However, 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.
Our view has been and continues to expect a trading range of $1.00-1.50/lb until that time the market proves otherwise.
Reference our previous 19Dec13 post recommending a trading range of $1.00-1.50/lb, see (http://murphycofutures.com/coffee-finds-support/)
Murphy & Co’s Coffee model is currently long. To learn more about Murphy & Co’s position models, visit http://murphycofutures.com/position-models/.