Cocoa
$CC_F COCOA weekly rejects 200MA, 50MA, 13MACocoa has been up since March, and this week it tried to break out of three MAs(13, 50, 200) and failed.
In the ST, it is not bullish.
But when you look at the COT positions, Money Managers are net short(long 42%, short 58%).
This is constructive.
It could retest Lower TL again, or go straight up.
Inverse Cocoa weekly long term Wyckoff phases for Inverse Cocoa weekly ,this study is the piece of a puzzle, this piece is saying that the short trend of the inverse of the Cocoa is over and we are in the initial phase of a future trend long, clearly for the future Cocoa it is the opposite, if this study It is correct, if other research confirms it, the future of Cocoa is a down trend for years .
‘Tis the season to be Chocolatey!While you’re enjoying the summer sun and clear skies back in SA paradise…
I’m afraid I’m not.
I’m trying to keep warm sitting inside a local restaurant in Greece with a cup of hot chocolate while I search for my next trade.
And surprise, surprise, cocoa popped up on my radar…
Here are three reasons why I’m buying cocoa and where I expect it to head next.
Reason #1: We are all buying
We are literally one month away from celebrating yet another Christmas.
And this is the top time of year where you, me and countless consumers will be buying chocolates.
This increase in demand, will have a positive impact on the price of cocoa…
Here’s a statement that Jack Scoville, analyst at Chicago’s Price Futures Group for “soft” commodities, has to say that coincides perfectly with the season:
“The weekly charts for cocoa imply that a significant rally is possible over the next few weeks,”
Reason #2: Thank the weather
Did you know two-thirds or 60% of the world’s supply of cocoa beans come from West Africa each year. This includes the Ivory Coast and Ghana.
You see, as cocoa is an agricultural commodity – the demand, supply and prices all have an impact based on the weather conditions and crop diseases that prevail.
Jack Scoville mentioned, for the incoming produce, that the harvest was active this week in the world’s largest growing region of West Africa, with good volume and quality.
It was also confirmed that the weather was also great for produce, due to the rain levels that West Africa received.
Jack then added, “The weather in Ivory Coast has improved due to reports of frequent showers.”
“The precipitation is a little less now so there are no real concerns about disease. Ideas are that the next crop will be very good. Both Ivory Coast and Ghana are doing what they can do boost cocoa prices.”
Reason #3: A new surcharge to boost the cocoa prices
This surcharge will have more of an impact than you think. Take the leading cocoa manufacturers including Hershey, Mars, Ferrero Group, Nestle etc…
Them and other companies depend on supplies from the Ivory Coast and Ghana for the beans.
This new premium will not only lead to a rise in price but also a further increase in cash flow, production, create sustainability and will allow farmers to boost wages for their workers.
And so the chocolate manufacturers have supported the two nations decision to add the $400 per ton surcharge.
Now let’s get into the charts…
Looking at the above daily chart of the spot Cocoa Futures price, we can see that since March 2019 the price has been moving in a sideways range between $1,640 and $1,940 (Shaded area).
Each time the price touched the $1,940 high, it then retraced back ended up making an even higher low.
This has formed what’s known as an Ascending Triangle.
This positive formation shows prices touching the same high while making higher, low prices, until there is a upside breakout.
This took place last week (red shaded area), which confirmed there was a lot more upside to come.
In fact, we can now expect the upside momentum to continue which will take the cocoa futures price to the next high - See the analysis above...
COCOA: On a multi month Higher High. How to trade it.Cocoa has been trading on a multi-year Channel Up since May 2017 with the 1D chart trading near the overbought territory (RSI = 70.555, MACD = 51.220, Highs/Lows = 144.4643).
If the Channel stays intact then the price should pull back towards the 1D MA200 for a Higher Low near 2,365. If however it breaks as it did in March 2018 then it can easily reach 2,940 which is the 2 year high. We have identified 2,700 as this break out point. You may trade accordingly with a tight SL.
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LONG CHOCOLATECocoa Long - Risk Reward 2:20
Cocoa is trading below the long term weekly trend, with strong selling pressure forcing it below the expected RSI and BBands for its current bull cycle.
Trade with tight stop on bottom of cyclical trend reversal.
Entry price range: 1.9 - 2.0
Exit price range: 2.26 - 2.35
Cocoa: Pending sell opportunity.Cocoa is currently trading on a 1D Channel Down (MACD = -26.310, Highs/Lows = -32.7143, B/BP = -53.5400) about to price its Lower Low. We have a pending short order on the 3rd estimated Lower High, which based on the previous channel's should be printed. TP = 2100.
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Cocoa futures monthly demand in control, long opportunitiesCocoa futures monthly demand in control, long opportunities. Going short with monthly demand level in control is very risky and low odds. Very strong monthly demand created with proximal line at 1995. New daily demand zones being created, not yet available. Longer term long bias with this monthly demand zone in control.
1W Channel Down. Short.Cocoa (CC1!) is on a very aggressive long term Channel Down on 1W (RSI = 37.498, MACD = -53.170, Highs/Lows = -176.9286, B/BP = -379.8580) and is currently also trending lower on the latest 1D bearish leg, equally as aggressive (STOCH = 21.862, Williams = -90.823). This is the third leg downwards on this Channel Down and based on the previous two it should reach a Lower Low around 1735. Our TP is higher at 1800.
COCOA TO GO 'LONG' for the futureQuick chart for my followers, cocoa to go long, if you have been following my other publishes then you would understand my chart without yellow full details, there may be further downtrend on the bottom yellow line but overall cocoa is on the uptrend as it has hit top yellow line.
Top yellow line at 2051
Bottom yellow line at 1800
Please study your indicators understand some, as they would help you determine a suitable entry point. use lower timeframe views such, Weekly and Daily view for a suitable entry point to go uptrend.
Also, do set stop losses but be generous with how much room you allow for this due to candle wicks and there is also the possibility to hedge yourself, for more confident traders.
All comments and questions welcome, if curious about indicators I use then feel free to inquire.
Cocoa Elliott Wave IdeaCocoa appears to have completed a multi-year correction in May 2017 to 1792 in the form of WXY; could be a great buy with a stop loss below that point.
There was a very big starting wedge for wave 1, followed by a complex WXY for what could be wave 2...Cocoa might already be in the next impulsive move towards new highs
Cocoa Buy IdeaCocoa Buy Idea @Weekly Demand Zone (2045 - 1803)
Buy Limit: 2065
Stop Loss: 1779
Take Profit: 2453