NY coffee may stabilize around $3.5415 and bounce again in Q4

By Reuters News

SINGAPORE, Sept 28 (Reuters) - New York coffee may stabilize around a key support at $3.5415 per lb again in the fourth quarter and bounce toward a range of $2.8775-$3.2130.

The support is identified as the 61.8% retracement of the uptrend from $1.4550 to $4.2995. A strong bounce occurred when the market failed to break this support at its first attempt in June.

The bounce looks incomplete. It may consist of three waves. The current fall is riding on the second wave, the wave b, which may end around $2.5415.

The third wave, an upward wave c, would start, to partially or totally reverse the wave b, which developed from the July high of $3.57.

The length of the forthcoming wave c remains unclear. A strong wave c may drive the price into the $3.2130-$3.6280 range, while a weak one may peak in the lower range of $2.8775-$3.2130.

A break below $2.5415 could open the way toward $2.1265. The break will be confirmed when the market falls below $2.3885.

On the daily chart, a projection analysis on a downward wave c from $3.4575 marks a support zone of $2.4370-$2.5855, formed by the 161.8% and the 138.2% levels.

The key support of $3.5415 on the weekly chart falls within this zone. Together, these supports are likely to hold and stop the fall.

* Wang Tao is a Reuters market analyst for commodities and energy technicals. His analyses are published exclusively on Workspace -- a platform provided by London Stock Exchange. The views expressed are his own.

** No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.


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