NY cocoa may revisit $2,226 in three months

SINGAPORE: New York cocoa may revisit its Nov. 10, 2017 high of $2,226 per tonne in three months, as suggested by its wave pattern and a Fibonacci retracement analysis.

The drop from the December 2015 high of $3,429 consists of five waves. So far, only three waves have completed. The fourth wave labelled 4 is unfolding. It comprises three smaller waves that may form a flat pattern, which means the current wave c could travel to $2,226.

A Fibonacci retracement analysis on the uptrend from the December 2000 low of $707 to the March 2011 high of $3,775 reveals a support at $1,879, the 61.8 percent level, which could be strong enough to trigger the second bounce towards $2,241.

Another retracement analysis on the daily chart reveals that the wave c could have just started around a support at $1,860, the 7 percent level.

The golden cross on the daily MACD simply suggests a further gain as well. A break below the April 20, 2017 low of $1,756 may open the way towards $1,431 (first chart).