Been reading the past couple of days how some coffee traders are getting out of the trade because of the chart for the price of coffee. Charts show coffee hit a double top at $2.10. (Not coincidentally, JVA hit a double top at $8.50 as there is correlation between the price of coffee and JVA but with about a 4 week lag).
What chartists are ignoring is that this is the worst crisis in coffee since 1975 when black frost wiped out more than 70% of the coffee crop for 2 years. The current problems will be felt for at least a couple of years and, imo, coffee prices haven't hit anywhere near their peak.
Once coffee closes higher than $2.10, the chartists will throw away their charts and take new long positions. Coffee, and JVA, will explosively break through their double tops. JVA "could" earn more than their entire $1.3 million profit (for the quarter ended Jan 31st) just from their contracts in coffee holdings. Coffee was only $1.20 at it's highest in the last quarter so their will almost certainly be unrealized gains from their hedging activitiies.
Looking forward to the chartists ditching their charts once coffee, and then JVA, blast through their "double tops". Fundamentals DO matter and it's only a matter of time before the world realizes that a coffee shortage is in it's very earliest stages of developing. Coffee inventory levels will go lower and lower and at some point, panic will ensue. Investors will come here in droves.