Financial Daily from THE HINDU group of publications
Tuesday, Dec 21, 2004
Financial Daily from THE HINDU group of publications Tuesday, Dec 21, 2004 |
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Agri-Biz & Commodities
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Technical Analysis Coffee in early stages of bull run B. Krishnakumar
THE near month CSCE coffee futures price has moved in line with expectations (BL dated April 6, 2004). After dropping to the 64-65 cents range, coffee price have been on an uptrend in the last couple of months. The first target of 79.2 cents (per pound) has been achieved. Short-term view: The outlook remains bullish and the price appears to be on course to hit the next target of 150-160 cents that was mentioned earlier. The series of higher highs and higher low pattern is an indicator of bullishness. Confirming the bullish outlook, coffee price recently staged a breakout from a "bull flag" pattern. Other technical indictors including the MACD (moving average convergence divergence) portray a positive picture as well. In Elliott Wave parlance, the prices have completed a set of "impulsive" move on December 2. After a correction to this "impulsive" pattern, the next segment of the impulsive move (which in turn should break into five segments) appears to be underway. The price is expected to touch the 150-160 cents target zone in the current leg of the rally. Long-term view: The weekly and monthly price charts indicate that coffee is in the early stages of a bullish trend. The eventual target for the present leg of the rally is placed at 190-200 cents per pound. This is our long-term target, which is subject to the prices holding above the 80-cent mark. A drop below 80 cents would negate our long-term bullish outlook and would warrant liquidation of long positions.
(Note: The above analysis is based entirely on technical analysis of the historical price movement. There is a risk of loss in trading.)
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