What Will July Orange Juice Do Friday?

• The orange juice futures market rolled into an intermediate-term downtrend on its weekly charts in mid December. 

• Since then, the July futures contract has lost nearly 50% of its value. 

• However, heading into Friday's session the same July issue is in position to change direction. 

As I was thumbing through a variety of charts Friday morning, I stumbled upon the July Orange Juice (OJN25) weekly. The OJ market has gotten some press lately from its free fall with the July issue losing $2.6305 per pound since posting its high of $5.02 the week of December 16. For those keeping track, that’s a loss in value of 48%.

Here’s where things get fun, though, from a technical point of view:

• Weekly stochastics are deep in single digits, indicating a sharply oversold market, and nearing the establishment of another bullish crossover below 20%
  • Signaling a potential move to a secondary (intermediate-term) uptrend
  • The initial crossover was on Friday, February 28
• The July issue posted a new contract low of $2.3895 this week before closing Thursday at $2.5850
  • Last Friday’s settlement was also $2.5850
• If July orange juice closes higher for the week, it would complete a bullish spike reversal on its weekly chart
  • Confirming a move to a new secondary uptrend

Fundamentally the market remains bullish, as indicated by the 1.3-cent inverse in the July-September futures spread.

I learned a long time ago one has to be brave, or crazy, to trade orange juice futures. Or possibly a little bit of both. Let’s see what happens Friday.