The resistance is identified as the 76.4 percent projection level of a wave C from $2,113. At its full capacity, this wave could travel to $2,550. The deep fall on Thursday, however, makes this target doubtful.
The wave C may also end about $2,447. A peak seems to be developing below this level. The exact pattern of this peak remains unknown. The pattern may turn out to be a head-and-shoulders, which is only partially complete. Cocoa may stabilize around $2,383 and then approach $2,447, to complete the right shoulder.
A break below $2,383 could eliminate the possibility of this head-and-shoulders, and a bearish target at $2,332 will be established.
Note: Cocoa report is published twice a week, Wednesday and Friday.
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** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. **