What’s being going on in the Cocoa market since we issued a sell signal on December 18 at 3251? Well, as the chart below shows, not much. Seasonal patterns suggest Cocoa should head lower into February but a corrective rally back up to around 3400 is certainly possible to remove some of the oversold levels since the decline from the December high of 3510 (basis March contract).
Price action since our sell signal
Current price movement is very choppy which is representative of a correction so we wait and watch. It is possible that our stop loss of 3380 will be hit soon. If so, we’ll likely be able to renter on the next leg down if our indicators are correct.
