Trade of the week: short Arabica Coffee
We would like to short Arabica coffee because of triple RSI negative divergences on the daily and weekly charts and it trading close to its February 2022 peak.
A wide stop at 261.00 should give counter-trend traders enough breathing space for the 200.00 downside target to eventually get hit.
(AI Video Summary)
Previous US natural gas trading outcome
In last week's trading session, a successful short position was taken on US natural gas futures at 2.24, leveraging a protective stop loss. Despite initial price increases, the market fell, validating the strategy as prices continued to drop.
This week's trading opportunity
The focus then shifts to Arabica Coffee futures, currently making multi-year highs. Observing negative divergence in the Relative Strength Index (RSI), despite rising prices, signals a potential price reversal.
This week's trade recommendation involves going short on Arabica Coffee futures at around 254.74, with a wide stop loss at 261.00 and a downside target of 200.00, anticipating a significant downward correction based on the analysis of both daily and weekly chart trends.
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