New York cocoa may bounce to $2,480 in second quarter

• The fluctuation from the April 2018, high of $2,943 is being shaped into a triangle, which may turn out to be a bullish continuation pattern.
• A break above $2,480 could lead to a gain to $2,928, while a failure could be followed by a drop to $2,204 again.

SINGAPORE: New York cocoa may bounce to $2,480 per tonne next quarter before choosing its next direction.

The target is identified as the 23.6pc projection level of an upward wave C from $1,756. This former support failed to hold the fall.

The current support at $2,204 may work well and cause a decent bounce.

The fluctuation from the April 2018, high of $2,943 is being shaped into a triangle, which may turn out to be a bullish continuation pattern.

A break above $2,480 could lead to a gain to $2,928, while a failure could be followed by a drop to $2,204 again. A fall to $2,165 could confirm a break below $2,204 and a target at $1,971.

On the daily chart, a retracement analysis on the uptrend from $1,756 to $2,935 reveals a support at $2,206, the 61.8pc level, which almost coincides with $2,204.

Cocoa is highly likely to end its sharp fall from $2,935 around $2,206, and bounce into $2,346-$2,485 range.