Cocoa: Potential Reversal Opportunity After Recent DropAfter capturing the significant drop in Cocoa prices over the past few days, we could now be looking at a favorable setup for a reversal to the upside.
Key Observations
Demand Zone Reaction:
Price has entered a major Demand Zone , collected liquidity, and is showing a sharp bounce directly from the opening.
RSI Recovery:
The RSI is rebounding strongly from oversold levels, signaling a possible shift in momentum.
Gap to Be Filled:
There is a visible gap between 11,750 and 11,100 that aligns with our upward target. Filling this gap could provide the momentum for a bullish run.
Trade Setup
Take Profit: 11,750 (gap fill target).
Stop Loss: 9,525 (placed below the Demand Zone).
Risk Management Reminder
Cocoa is known for its volatility. Always apply proper risk management and adjust your position size accordingly to protect your capital.
Conclusion
This setup provides a solid risk-reward opportunity for traders watching the Cocoa market.
