I want to get long coffee. My reasons are technical and contrarian. Coffee has lost 75% of its value since may 2011. The monthly chart below shows the steep decline. Over the last three months it seems to have been stalling.
The Weekly had a strong close above 22. On the test back down I bought some stock in JO.
On the daily I would like to see a close over 23.50 and to stay above 21.50. It has broken its most recent trendline.
I also compared sbux to coffee prices and even though sbux isn't a pure play on coffee it is definitely affected by coffee prices. As you can see that have a high inverse correlation. The fact that sbux has been parabolic and is starting to turn down backs my belief that there might be a bottom in coffee.
