DJones - Technical Special: ICE May Coffee Forming Potential Bear
 Pennant ICE May coffee futures have been consolidating in a sideways fashion fornearly two weeks, forming a potential "bear pennant" formation on the dailychart. That pattern hasn't yet been confirmed, but it is a traditionalcontinuation pattern, which would suggest downside losses on a confirmedbreakout. ICE May coffee recently traded down 190 points at $2.0220 a pound. Taking a look at the longer-term trend, the ICE May coffee contract has beenin a larger bear trend off the May 2011 peak above $3.1100 a pound. The marketis below the key 200-day moving average, currently at $2.4513. Trend-followingtraders generally interpret that as a bearish signal when price is below the200-day moving average. After consolidating for several months from December into February, the bearsforced a downside break to new 2012 lows on Feb. 13. For several days themarket dived lower, forming the so-called "flagpole" portion of the bearpennant. The recent consolidation sideways is forming the actual pennant. But,now a downside break below the lower trendline drawn off the Feb. 16 and Feb.29 daily lows would be needed to confirm the bearish potential of this downsidecontinuation pattern. That trendline comes in around $2.0193. Two consecutive settlements belowthat trendline would provide bearish confirmation of a fresh downswing ofmarket action. John Isaacson, analyst at the Hightower Report in Chicago, pointed to thebigger picture in the coffee market. "From the April peak, it has been in anice downtrend. It is a mature downtrend," he noted. Pointing to the recent sideways action, Isaacson added that "it is laboring"with little progress on the upside seen. He pointed to a potential trading opportunity. "Look to sell strength in the$2.2000 area, risking to the Feb. 7 high at $2.2500, with a target at $1.9000,"he concluded.