It’s a classic setup…

After years of underperformance in an asset, investors tend to give up. They turn elsewhere in search of better returns… forgetting about the loser.

For contrarians, that’s the time to pay attention. It’s when big gains are most likely.

So when you see a hated asset entering an uptrend, that’s when you want to put real money to work.

Today, we have this exact setup in a beaten-down commodity. It’s coming off its most hated level in history. And we are now seeing signs of an uptrend for the first time in years.

History says a 50%-plus gain is possible, thanks to this setup. And we have a simple way to take advantage of it.

Let me explain…

Most commodities have taken a beating in recent months. But one in particular is setting up for potentially massive gains right now.

This opportunity comes from a commodity most investors never consider. But it’s one you need to put on your radar today.

One of the best places to make money in commodities now is in coffee.

Coffee has entered the classic setup we look for. The commodity recently hit a major sentiment extreme… and it’s now beginning to move higher.

We can see this negative sentiment through the Commitment of Traders (COT) report. This is a real-money indicator that looks at what futures traders are doing with their money.

When futures traders are all betting in one direction, it typically means the current trend is close to an end. The overstretched rubber band is likely to snap back.

Today, coffee is bouncing back from its most hated extreme in history. Take a look…

The chart shows the recent sentiment bottom in coffee. September marked the most hated level for coffee since the COT report began in the mid-1990s.

We’ve seen just a handful of cases where sentiment was even close to today’s levels. And each time, coffee prices soared double and even triple digits.

Specifically, we saw similar hated levels in 2013 and 2016. Both times turned out to be great buying opportunities.

In 2013, you could have made 100%-plus gains in roughly a year. And in 2016, you could have made another 50% gain thanks to incredibly negative sentiment.

I’m not betting on triple-digit gains this time around. But we are finally seeing signs of an uptrend in coffee. The commodity is up double digits since bottoming in September. And that makes now a safe time to consider putting money to work.

If you’re interested, you can bet on higher coffee prices through the iPath B Bloomberg Coffee Total Return ETN (BJO). This is a simple investment vehicle that tracks the price of coffee. And it’s the easiest way to make the trade.

Coffee is hated and beginning to move higher. And if this trend continues, 50%-plus upside is possible, based on history. It’s the perfect contrarian setup… So consider putting money to work in this idea today.

Good investing,

Brett Eversole

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Source: Daily Wealth