Time To Take Sugar With Your Coffee?

It's hard to find many financial instruments that have performed well in recent weeks. Fears of an economic slowdown (or maybe even a recession) caused by industry shutdowns and significant slowdowns because of concerns over the COVID-19 virus have hammered stocks, currencies and many commodities.

Last week, though, one commodity rose 11.81% - coffee arabica. Apparently, roasters around the globe were buying up the beans out of supply-chain concerns. And from the middle of last week, that buying demand slipped into the sugar market, where prices were up 2.25%.

So, is it a good time to be buying coffee and sugar? Looking at the moving average/RSI charts on Excalibur Pro (www.excaliburpro.net), you may find a yes and no. Coffee arabica blew through (on the upside) its 200-day, 100-day and 50-day moving averages last week. But it also is pushing closer to the RSI value (70) that tells you when an instrument is overbought. Coffee arabica ended last week with an RSI of 61.1.

Sugar this month blew through its 200-day, 100-day and 50-day moving averages as well - but going in the other direction. However, its RSI sits well below the threshold (30) that is considered an oversold condition. Sugar's RSI finished last week at 21.6.

The charts seem to indicate more upside potential for sugar although coffee could still see a pop if roaster demand remains robust.