NY cocoa may fall into $2,187-$2,287 range in Q4
- The contract is riding on a wave c from $2,708, which is the third wave of a bigger wave B from the February high of $2,935.
SINGAPORE: New York cocoa may break a support at $2,386 per tonne, and fall into a range of $2,187-$2,287 this quarter.
The contract is riding on a wave c from $2,708, which is the third wave of a bigger wave B from the February high of $2,935.
The preceding wave A developed over 146 weeks, while the current wave B just 35 weeks.
The wave B may still have a long way to go.
It consists of three waves.
The third wave, wave c, is unfolding.
A projection analysis on the wave c suggests a wide target zone of $1,865-$2,187, formed by its 100pc and 61.8pc projection levels.
A realistic target could be either $2,287 or $2,187.
The pattern from the Aug. 7 high of $2,527 looks like a head-and-shoulders, which is clearer on the daily chart.
The right shoulder is yet to develop.
A retracement analysis on the uptrend from $2,092 to $2,708 suggests the start of this shoulder in a support zone of $2,327-$2,400, formed by the 61.8pc and the 50pc levels.
Based on this assumption, cocoa may move sideways in a range of $2,327-$2,473 for some time before resuming its downtrend.
Resistance is at $2,473, a break above which may lead to a gain to $2,563.