Solving the Coffee Problem

After a spectacular first several months of 2014 and countless reports of favorable fundamentals, the coffee commodity has since settled into a whippy range. The issue is whether we see a resumption of the impressive strength from early last year, or instead if it was an aberration in an otherwise multi-year downtrend. On the weekly chart for JO, the coffee ETF, below, bulls stepped in this week just when things looked dire for a fresh breakdown. As long as the $30.50 area can now hold as support it appears bulls have a fighting chance to stage another first quarter rally. Tackling $36 will be the major battleground. But with this strength early on, I have coffee back on the radar for a long trade.