Coffee Analysis May 2015 (D,W)
Created on Friday, 01 May 2015 00:10
Written by Austin Galt
Price looks to have finally found support at the projected area outlined in previous analysis. Let’s update the situation using the weekly and daily charts.
COFFEE WEEKLY CHART
I still believe a big 7 point broadening top formation is in play and the wave 6 low is finally in place. I now expect a big rally up to a wave 7 high with likely levels for top outlined in a recent article titled Coffee Brewing Something Big.
I have added Fibonacci retracement levels of the move up from November 2013 low to recent high and we can see the 76.4% level at US$130.33 has provided solid support. The actual low was a touch below at US$128.75.
The PSAR indicator now has a bullish bias and looks to be setting up a launching pad for price to explode higher shortly. Price breaking this support now would be bearish.
The Stochastic indicator showed a bullish divergence at the recent low and is now trending up and looking bullish while the MACD indicator also has a bullish bias with the red line below the blue line.
Let’s now look in tight with the daily chart.
COFFEE DAILY CHART
Since the recent low price has started trending up gradually making a pattern of higher highs and higher lows. Price appears to be laying the foundations for an imminent explosion higher.
I have drawn a horizontal line which denotes the level whereby a bullish double bottom with the trend has formed. This level stands at US$131.80 and price should not trade below there now.
The Bollinger Bands show price bouncing up and down between the upper and lower bands. This looks all part of the foundation building process.
The PSAR has a bullish bias with the dots above price so the stage is now set for price to surge higher if it is ready to do so.
The MACD indicator has also been trending up recently showing a pattern of higher highs and higher lows indicating a bull trend.
Summing up, I am expecting a big rally and, after waiting patiently for the next nice buy setup to appear, conditions now look suitable for that to commence.