The Single Best Commodity Play of 2013?
Big money is going long on coffee with expectations that prices will rebound next year.
Weekly, Hourly, and Seasonal Chart of JO, the Coffee Exchange-Traded Fund
The top weekly chart shows my price targets for 2013 while the lower hourly chart shows strong on balance volume, which means that big money is slowly building a long position in coffee. The small white chart is the seasonal chart of coffee futures, showing prices historically rise from January to March; then there is a correction followed by another rally into May.
Coffee prices are still in a downtrend, but it looks as though the end is near. If played properly, it could provide up to 100% return on your capital in 2013.
Coffee Futures Monthly Long-Term Chart
This chart gives you a bird's eye view on where coffee prices are trading in the big picture scheme of things.
JO Coffee ETF Vs. Starbucks (NASDAQ:SBUX) Share Price
Lower coffee bean prices has helped lift share prices of coffee companies like Starbucks, Coffee Holdings Co. (NASDAQ:JVA), Green Mountain Coffee Roasters Inc. (NASDAQ:GMCR), and Peet's Coffee & Tea (NASDAQ:PEET). But cheap coffee may not be around that much longer and the lower earnings for coffee brewers may be closer than most may think.
2013 Caffeine Conclusion
In short, I have been watching coffee prices for a bottoming pattern for months and I now feel it is getting really close to a bottom and it could be a great trade and investment in the new year. As for companies like Starbucks, it will likely not have much of an affect on the bottom line until the second half of the year though it is something to keep an eye on during earning seasons.
Editor's Note: Chris Vermeulen offers more content at his sites, TheGoldAndOilGuy.com and Traders Video Playbook.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter