Orange Juice Cup & Handle Signal Price Gains: Technical Analysis

Orange-juice futures that rallied to a seven-month high yesterday may jump 16 percent further by mid- February, according to technical analysis by Infinity Trading Corp.

Prices will top $1.60 a pound on ICE Futures U.S. in New York, the highest since April 5, after completing the “cup-and- handle” formation, said Fain Shaffer, the president of the Medford, Oregon-based Infinity. The futures contract for delivery in March closed yesterday at $1.375.

The so-called cup formation was created as March futures slumped from a high of $1.3095 on Sept. 14, bottoming at $1.0675 on Oct. 31, before resuming gains in a U-shaped turn that peaked Nov. 26 at $1.2865. When the price approaches its previous high, investors who bought at or near that level tend to sell. That occurred in the two weeks ended Dec. 10 that resulted in a so- called handle.

“The cup-and-handle formation is a bullish indicator,” Shaffer said yesterday in a Dec. 12 e-mail. Orange juice may reach $1.6195 in the next 30 to 45 days, assuming a 50 percent retracement from the low of 97.10 cents on May 18, Shaffer said.

Orange-juice futures through yesterday were down 18 percent from a year earlier, after reaching $2.2695 on Jan. 23, the highest on record for a most active contract.

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.

To contact the reporters on this story: Yi Tian in New York at; Marvin G. Perez in New York at

To contact the editor responsible for this story: Steve Stroth at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.