AndreasMunz
Long

Cocoa is getting ready to make a move

ICEUSA:CC2!   Cocoa
74 3 1
I have been neutral on CC             for the past few weeks, but something is brewing. I favor a break towards the upside for following reasons IMHO:

1. Support area ; failed to break to downside;
2. Broke out of downtrend.
3. Future spreads went back in backwardation
4. Buy signals on RSI and Stochastik
5. Bollinger Bands are very tight
high compression on bollinger hints of a potential moove - agreed) question is - which way?

snapshot


on long term basis it looks like a lateral movement
Reply
AndreasMunz Killy_Mel
It is a wait and see which way it breaks normally, but taking into consideration the term structure that has been firmer --> future spreads are back trading in backwardation over the last couple weeks (December15 trades 11 ticks over the March16 contract and March16 trades 5 ticks over the May16 contract) ; that paired with the support around 3000ish, and some buy signals on RSI and Stochastik a couple weeks ago point to the upside. At least according to my reasoning ;-) Overall, I have seen better buy levels in cocoa especially earlier this year
+1 Reply
Killy_Mel AndreasMunz
right. it is better to wait for a hint before taking a position...
+1 Reply
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