Had an eye on this one for a while and there've been a few points I thought we might be making a high in this but so far taken no action on it (Which has proven wise).
Now we have a strong confluence of sell signals, though. We have the potential AB=CD topping patterns and this comes in at the 1.61 head fake level.
See strategy info here:
1.61 head fake is...
On Wednesday, April 24th, the bullish gap opening price indicated a strong bullish sentiment for #Cocoa. However, the price faced rejection at the 61.8% Fibonacci retracement level, which coincided with the previous week's bar high on April 8th, 2024. A strong bullish close above 12265 by the end of this week would signal the continuation of the bullish trend for #Cocoa.
Scalpers and Day traders should pay attention to the potential bullish trap setup on #COCOA 4HR chart. IMO: A strong daily bar close down would suggest more possible bearish retracement to the lower band of the rising channel.
Not much of a technical analysis as we can see but there is not much we can do about it. The chart is just parabolic due to the high amount of big companies hedging against the worse-than-expected harvest. The fundamental analysis could not be much of a help either because nothing can resonate with such pricing for the cocoa. This type of trade is just speculative...
If you are interested to trade COCOA, which was in ATH few days ago, I´m suggesting to wait 5325 looks like a good entry level. BUT, please don´t use entry line as a trigger. Use REACTION on that line as a trigger. What does it mean? Price is going to fall there, most likely even below. When you see an aggressive close back ABOVE the entry line, enter and set SL....
COCOA has been in a consolidation pattern for multiple years now. Testing lower side of the pattern and upper side, now it's in a very confined range and the upper/lower resistance/support line are coming to agreement. It is trading above resistance now and this would make an ideal long-entry when buying the pullback on the now broken resistance line around...
COCOA is overpriced due to fundaments over the world. A slight correction would be welcomed. We might return back to the trend pattern. What's your opinion about this kind of charts ?
Be careful, commodities are volatile !
Possible pullback in strong larger timeframe uptrend.
Confluence of weakening Volume and MACD indicators as price continues to make new highs.
Fundamentals still strong, though South America upping production to compete with West African dominance.
I'm expecting cocoa price to fall to $3313.0 per ounces. Even though a short-term bull fluctuation move is valid for liquidity clearance, but shouldn't go above $3440.5 (forecast invalidation price).
Updating earlier idea.
Target hit. Full stop. :)
REMEMBER: Drawing lines on chart means nothig if you do not command and employ sound risk management principles.
Cheers,
Tenacious Tribe - Quantified Trading Strategies
The market rallied for a while. I expect the correction is just a matter of time.
My target around 3050, with expiry date for contract 10th August.
This is not a trading advice. Trading is risky, always to your own analysis.
Just updating the subject idea. Back in 2022, this textbook symmetric triangle had caught my attention, for how neatly and ostensibly it was being displayed.
I find this pattern interesting because of how it moves from volatility to the lack of it, slowly expelling the traders who are preventing this market from moving where it wants to, until they are no...
It looks like COCOA is setting up to cool off.
I'm not sure if it'll go lower than 20EMA - I consider this a low risk trade. I don't see the market going much higher without small correction first.
This is not a trading advice. Trading is risky. Always do your own analysis.
COCOA as many other agriculture products are rising in value due to failed farming yields or public supply chain disruptions. Reward Risk setup is given and important key features like support, resistance, trendlines.
