The Commodity Specialist view – year’s bear move in Cocoa was clearly signaled at the time (please refer to our 28th Jan Update), and has steadily unfolded. Recently in the Commodity Specialist Guide we have been looking at an interesting support area and this looks likely to prompt a rebound period very soon.
- WEEKLY CHART – CONTINUATION:
After failing to sustain above the 2008 peak subsequent weakness has now seen violation of first main support from the 2919 Feb-09 high and 2882 38.2% level.
This suggests bears have more to play for in due course, any s/term corrective bounce notwithstanding. - DAILY CHART – MAY-10:
The market has turned consolidative after testing/ eroding the 2813 Fibo projection (2.618 swing off prior 3245/3512 rally) which we had included in the 28th Jan Update. Note that the Feb-09 high on this chart was around 2800 – s/term support here is not a surprise.
A positive RSI divergence suggested bears were tiring.
We want to see a close above the 3000 area for a signal that a better recovery is underway – focus will then be on the 3220/45 area, 61.8% retracement and 28-Dec low, where good resistance should be seen.
Buyers on dips have a clear risk level in the 2745 16-Mar low.
We currently assume such a rebound will be the precursor to another bear wave.
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