Coffee Analysis March 2015 (D)

Let’s quickly update coffee using the daily chart.


Previous analysis showed the potential for a “three strikes and you’re out” low formation which was accompanied by a triple bullish divergence in the Relative Strength Indicator (RSI). While this set up usually leads to a significant rally, on some occasion it results in the complete opposite – a capitulation move. And that is what has occurred here.
We were onto this capitulation move early after price busted the monthly PSAR support which stood just under US$157. Now it is just a matter of being patient and letting this move down run its course.
The Moving Average Convergence Divergence (MACD) indicator is still trending down bearishly.
While a 5 point broadening top formation is in place, I continue to favour a rarer 7 point broadening top to see in the final high.
I have added Fibonacci retracement levels of the move up from low to point 5 high. It looks as if price has its sights set on the 76.4% level at US$130.38 but considering price is in a capitulation move then it would not surprise to see price push things to the limit and trade a bit lower.
I have added a Fibonacci Fan and I favour the final low finding support at the 88.6% angle which looks set to be just under the 76.4% retracement level around mid March.
Then once the low is confirmed we can investigate further where the point 7 high might be. If the analyst proves correct of course.


All information contained in this website is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors. Put simply, it is JUST MY OPINION.