The resistance is identified as the 50% projection level of an upward wave c from $2,008. Cocoa failed to break this resistance in its first attempt in July. With the accumulated strong bullish momentum, it is likely to succeed this time.
This wave is capable of travelling into the range of $2,742-$3,195. It is a part of a bigger C from the April 2017 low of $1,756. The wave C could extend into a higher range of $2,928-$3,652, formed by its 38.2% and 61.8% projection levels.
The rally from $1,756 is presumed to be an extension of the preceding uptrend from the December 2000 low of $707, as the long-term correction from the 2011 high of $3,775 ended around $1,879, the 61.8% retracement of the uptrend.
Even if this presumption turns out to be too bullish, a falling trendline still points a target around $2,928. A fall from the current level may be limited to the support zone of $2,204-$2,288.
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** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.