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2013 Forecast: Use Coffee To Boost Your Portfolio

By  |  Commodities  |  Dec 30, 2012 07:07AM GMT  |   1 Comment
www.investing.com/analysis/2013-forecast:-use-coffee-to-boost-your-portfolio-149097
2013 Forecast: Use Coffee To Boost Your Portfolio
By   |  Dec 30, 2012 07:07AM GMT
 
Coffee prices have fallen more than 50% since 2010 which can be seen through the coffee exchange traded fund symbol: JO. This investment seeks to replicate the returns that are potentially available through an unleveraged investment in coffee futures contracts as well as the rate of interest that could be earned on cash collateral invested in specified Treasury Bills.

Weekly, Hourly and Seasonal chart of the Coffee Exchange Traded Fund (JO)

The top weekly chart shows my price targets for 2013 while the lower hourly chart shows strong on-balance volume meaning 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 – March, then a correction, followed by another rally in to May.

Coffee prices are still in a down trend but it looks as though the end is near and if played properly it could provide up to 100% return on your capital in 2013.

JO
JO

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.

Coffee Long Term Monthly
Coffee Long Term Monthly

JO Coffee ETF VS. Starbucks (SBUX)Share Price:

Lower coffee bean prices has helped lift share prices of coffee companies like Starbucks (SBUX), Coffee Holdings Co. (JVA), Coffee Roasters Inc. (GMCR), and PEET’s Coffee (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.

Coffee Brewer
Coffee Brewer

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.
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Starbucks Corp
 
 
 
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Comments
Peter Dikeakos
Peter Dikeakos Dec 30, 2012 11:24PM GMT
The price of coffee beans r e l a t e s to the real strength of the economy; the economy is on Fed boosters : Tons of promise; grams of substance !!
 
 
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