In the five months since we first got long, the caffeine-packed bean has rallied over 50%.
That's a massive move for a commodity in such a short amount of time!
But we think this one's just getting started and will likely surge higher for the foreseeable future.
Coffee futures are breaking out of a 48-year base:
In technical analysis kindergarten, you'll learn that "the bigger the base, the higher in space." This is especially true in this case.
We think this long-term parabolic uptrend has the potential to carry the price far higher than we can imagine.
Just look at how cocoa rallied 400% in less than 2-years.
For now, we're targeting 524 and 823 over longer timeframes.
Coffee futures are reaching extreme overbought momentum levels:
As you can see, the price carved out a textbook continuation pattern right below the shelf of former highs from the 20th century. After several weeks, the bulls recently regained control, and they've driven the price to a new all-time high.
Accompanying this sharp price increase is extreme overbought momentum readings. These are some of the highest readings ever and support the underlying uptrend.
After all, how can an overwhelming amount of demand be a bad thing for the bulls?
The bottom line is we want to own coffee futures above 333, with a target of 452 over the coming 2-4 months.
