A Pure Reversal Brewing in Coffee Today

If the coffee ETN goes out near the highs today we should have a fairly textbook daily chart “hammer” reversal candlestick off the lower Bollinger Band.

Both of these technical circumstances would have me looking towards an upside reversal in coffee into the end of this week.

After being active with them on the long side earlier this year, I have backed away from the action in the soft commodity complex in recent weeks as they consolidated.

However, with today’s action across the space I am becoming interested again.

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Earlier today inside 12631 I snagged a $31.81 long entry in TWTR, which has been a veritable death trap of sorts for longs in 2014.

Typically, this is not my kind of chart, just like my FEYE LNKD YELP longs last week were not.

However, in this market I am finding these beaten-down growth stocks are making for good, quick snapback rally long plays as long as I stay disciplined.

With this in mind, I found the $30 level to be a sound stop-loss zone for my long in Twitter, targeting a bounce up to the daily chart upper Bollinger Band and 50-day moving average, highlighted on the daily chart below in the upper-$30’s.

As far as sentiment is concerned, I have noticed a considerable drop-off in the number of bottom-fishers in the name in recent weeks after what figures to have been short-term capitulation.

Let’s see how it plays out. I have about a one-point profit cushion thus far on the trade.

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Courtesy of The PPT algorithm, here are the most current top five readings from my “12631 RELATIVE STRENGTH” custom-made screen, identifying which stocks are exuding some of the best performances to the market at-large at any given moment.

I look for stocks whose Daily PPT Hybrid Score surges, while the Weekly Hybrid has been negative over the past week. This can often yield stocks which are emerging from consolidations.

Members can click here to view and save the screen.

Sorted for at least 500,000 shares of daily average volume to ensure liquidity.

Please click on image to enlarge.

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Natural gas has caught a nice bid the past two sessions, as the UNG ETF surged over $25.

In particular, I am keying off the hourly chart, below, to see if the move over $25.20 sticks. I have been observing that exact print as a significant one for a while now.

UGAZ is my preferred levered long way of playing natty.

Overall, natural gas has been consolidating the rally from earlier this year. Watch this $25-$25.20 area.

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It does not get more American, these days at least, than the stock of Goldman Sachs.

Sarcasm aside, I would be keying off Goldman this morning to see if the pennant (light blue lines) breakout attempt on the daily chart can hold to the upside, as well as the 50-day moving average (dark blue line) to the downside.

Below there, and due to the still-damaged charts of many financials, I would consider shorting.

In the meantime, I am looking for new setups.

What are you trading this morning?

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The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out). which I published for members and 12631 subscribers this past Sunday. 

In addition to the energy, utility, transports, and consumer staples begin late-stage bull market movers, historically, the agricultural and fertilizer firms are also capable of benefiting from mature bull market capital rotations. Recall the ferocious rallies seen in the likes of MON MOS POT at the end of the 2003-2007 bull market, with their strength even spilling over into the first half of 2008. 

Monsanto broke out impressively last week above well-defined resistance. Should that breakout hold over $117.50, keep an eye on MOS POT to follow MON higher in the ag space this week, both of them working through reasonably attractive consolidations at the moment. 

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