Trading the trend: short robusta coffee
Since front-month robusta coffee futures have been trading towards the top of their August-to-November sideways trading range and have given a technical sell-signal we would like to short at 2,474 with a stop-loss above 2,569.
(Video Transcript)
Short soyabeans trade remains viable
Good morning and welcome to this week's trading the trend on Wednesday 29 November 2023. Now first of all I'd like to apologise, because on Monday when I did trade of the week I mixed up trading the trend and trade of the week.
And basically for those of you who are still short soyabeans, that trade is still ongoing. We didn't get stopped out. Maybe what we can do is just lower our stop loss from 1,437 to the current November high of 1,402. So that's with regards to last week's trades.
Long the S&P 500: time to cash in
But with regards to trading the trend, last week we went long the S&P 500 and, as we can see on the daily chart here, we continue to rise in very low volatility after the Thanksgiving weekend.
Maybe just cash this one in because we are overbought here as you can see on the relative strength index (RSI). And we could perhaps, with the personal consumption expenditure (PCE) inflation data coming out just US on Thursday, see a reversal potentially.
So I would just cash in our longs from around 4,500, which we initiated in the middle of November and do so around current levels.
Hot trade brewing with short robusta coffee
And with regards to this week's trading the trend, now here you can see we had a downward trend from June of this year with regards to robusta coffee but then have been trading sideways since August of this year.
And it looks to me as if every time we go up around the 2,550 area, we fail, we come down again. So, therefore, I'd like to now go short on this latest short signal here with regards to robusta coffee with a downside target of around the 3,360 area or so.
So for this week's trading the trend, what I would like to do is to go short robusta coffee on a technical basis and do so around current levels with a stop loss above the October high of 2,569 and a downside target around the 2,360 area.
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