Cocoa Technical Analysis – Cocoa Trading: 2022-03-08

 Cocoa Technical Analysis – Cocoa Trading: 2022-03-08

Cocoa Technical Analysis.

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Cocoa Technical Analysis Summary

 Buy StopÖ‰ Above 2650

Stop Loss: Below 2440

IndicatorSignal
RSINeutral
MACDSell
MA(200)Buy
FractalsNeutral
Parabolic SARBuy
Bollinger BandsNeutral

 

Cocoa Chart Analysis

Cocoa Technical Analysis

On the daily timeframe, COCOA: D1 is in the medium-term rising channel. It has overcome the 200-day moving average and is moving towards the upper border of the channel. A number of technical analysis indicators formed signals for further growth. We do not rule out a bullish move if COCOA: D1 rises above its most recent high of 2650. This level can be used as an entry point. The initial risk limit is possible below the 200-day moving average line, the last lower fractal, the Parabolic signal and the lower Bollinger band: 2440. After opening a pending order, we move the stop following the Bollinger and Parabolic signals to the next fractal low. Thus, we change the potential profit/loss ratio in our favor. The most cautious traders after making a trade can switch to a four-hour chart and set a stop loss, moving it in the direction of movement. If the price overcomes the stop level (2440) without activating the order (2650), it is recommended to delete the order: the market is undergoing internal changes that were not taken into account.

Fundamental Analysis of Commodities – Cocoa

The global cocoa crop may decline in the current growing season. Will the COCOA price increase continue?

The International Cocoa Organization (ICCO) predicts a decline in global cocoa production in the 2021/2022 season to 4.95 million tons. This is 5.2% less than in the previous season 2020/2021. According to ICCO, this will lead to a global shortage of cocoa in the amount of 181 thousand tons, while a surplus of 215 thousand tons was observed a season earlier. The main reason for the global deficit could be the lack of rain in West Africa and the recovery in global demand for chocolate after the end of the coronavirus epidemic. Due to uncertain weather conditions, estimates of Ghana’s cocoa harvest range from 750,000 tons to 950,000 tons for the 2021/2022 season. In the previous season 2020/2021, the harvest was a record one and amounted to 1.05 million tons. Nigeria in January 2022 reduced its cocoa exports by 8% y/y to 46.1 thousand tons.

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