NY cocoa targets $2,177-$2,300 range in Q1

SINGAPORE: New York cocoa may retest a support at $2,400 per tonne next quarter, a break below which could cause a fall into a range of $2,177-$2,300.

The contract is riding on a wave C from $2,821, which is the third wave of a corrective wave cycle from the February high of $2,935.

This wave may end around $2,300, if it is weak, or $$1,978, if it is very strong.

In terms of time, this cycle looks far from complete, as it only developed 24 weeks, which is too short compared to the preceding uptrend from $1,756 to $2,965, which lasted 146 weeks.

A small wave b ended at November low of $2,247, which suggests a further fall towards this level as well.

Resistance is at $2,499, a break above which could lead to a gain into a zone of $2,622-$2,698.

On the daily chart, both a retracement analysis and a projection analysis indicate a drop towards $2,354-$2,370 range.

Only a break above $2,649 could signal a continuation of the uptrend from $2,092.

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