Coffee Trying To Base - But a Hurdle Remains

In October the rate of descent slowed, with recent price action showing bears were pausing for breath. However, bulls must find their strength soon, otherwise the shorter term prospects of a base will dwindle.

• WEEKLY CHART – CONTINUATION: Next support on the longer term chart comes from the 76.4% 101.15 level plus the slightly lower 100.00 2007 lows. Should a s/term base fail to materialize then this area becomes next target.
• DAILY CHART – MAR-09: One of our Fibo targets had been the 2.618 swing projection off prior 138.90-155.70 Aug rally (around 111.70) which has worked nicely as s/term support. There remains the chance of a modest base forming (whatever name one might care to give it), requiring at minimum a close above the small falling resistance line at 121.70, a stronger signal coming from a higher close above the 123.35 05-Nov high. We would then target towards the 137.05/140.00 area, incorporating the Mar-08 low and old rising support/return line. A break below 110.10 27-Oct low would negate the basing idea, and open the way instead to the 101.15/100.00 area mentioned above. [For the complete and illustrated version of this and future Updates be sure to sign up at www.sevendaysahead.com]