Trade of the week: long Arabica coffee futures
The current bounce off support in Arabica coffee futures points to the resumption of the long-term uptrend. This is why we would like to go long with a stop loss below the recent lows at 242.70 and an upside target around 272.00.
(Partial video transcript)
Previous trading outcomes
Axel Rudolph: Hello and welcome to this week's "Trade of the week" on Monday the 28th of October, 2024. We've got a lot to go through. So, let's begin with our soybean trade from the beginning of September which is still in profit. And you can see here we went short at 1,020. Now you can lower your stop loss level to your entry level. So we've got a free trade on. And our downside target was down at 910. If you cashed in now, you would make about 30 points profit. You can do that as well.
And then what we also did is we went long the Volatility Index, the VIX, and there we had a move up. If you haven't cashed that in, I think we moved our break even level to our entry level. So either you made money on that at the beginning of October or you just got out flat on this one. So that one's done as well.
And then we went short the NASDAQ 100 and got stopped out of that and went actually long on a 'stop and reverse' order on the NASDAQ 100. And we've been long since the middle of October, and now we're currently in profit again. So again, here what you can do is either move your stop loss level to your entry level. So you've got a free trade on in theory. Or you can just cash in your profits, of about 200 and something points here at the moment. And perhaps that might be a good idea because we could still potentially get triple negative divergence where we've got higher highs, three higher highs on the daily chart, but we've got lower highs on the oscillator, on the Relative Strength Index (RSI). So that's for you to consider.
And then we also had a New York cotton trade on. And we did so, I think it was on the 14th of October. And you can see here New York cotton futures went up last week, but since then have come off again. And here we can lower our stop loss level, which was above these highs here, to the last relative highs. So to let's say 74.40. You can lower your stop and just let this one run. The downside target is still around here, around 68 or so.
And then last week, my colleague, Senior Market Analyst Chris Beauchamp, went long the British pound against the US dollar (GBP/USD) - cable - here, and unfortunately got stopped out at $1.295. So that one's gone as well.
This week's trading opportunity
And this brings me to this week's "Trade of the week", which is to go long the Arabica coffee futures contract, as you can see here, we're bouncing off some support. And I believe that the long-term uptrend will resume.
So this week's "Trade of the week" is to go long Arabica coffee with a stop loss below the recent lows around 242.70, and an upside target around the 272.00 mark.
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