Trade of the week: long Arabica Coffee
Since Arabica coffee prices seem to be forming a medium-term bottom on the Daily Financial Bet (DFB) chart we would like to go long with a stop loss below the July 2025 27,590 low and an upside target at 35,400.
(Partial video transcript)
This week's trading opportunity
Today's "Trade of the week" is to go long Arabica coffee. The reason is mainly technical. As you can see on my chart at 0:14 in the video above, we are forming a bottom and we managed to close on Friday above the previous relative high seen here on the 13th February, and also above the one seen on the 9th March, telling me that the odds are greater that we are now seeing a reversal than a continuation of the trend.
And it looks similar to me as what we saw back in July and August of last year seen here at 0:18 in the video, when we had a surge higher follow through from that reversal to the upside. Obviously what's also going on in the Middle East might push commodity prices in general higher. And Arabica Coffee might be one of those commodities which may rise with regards to its price because of that. And that's probably what has pushed the price of Arabica Coffee above the previous highs we saw just a few weeks ago.
So, the "Trade of the week" is to go long Arabica Coffee at 30,800, with a stop-loss just below the July low of last year at 27,590, and with an upside target in the, sort of, 35,400 area, as you can see here at 1:19 in the video, around these previous lows and highs that we saw last year.
Previous week's trading outcome
Now, going back to last week's "Trade of the week", as you can see here, we went long the CAC 40, the French stock index. And that looked promising for the first three days. As we were rising, we got a really good entry level here. But then with the escalation in the Middle East, the whole situation turned sour and we got stopped out with a 2% stop-loss, as we always do, on the low here on the 9th March, on that low being broken through. So the CAC 40 position is closed out.
This week's trade in summary
Coming back to this week's "Trade of the week", it is to go long Arabica Coffee at 30,800, with a stop-loss at 27,590, just below the July 2025 low, and an upside target around 35,400.
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