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Cocoa Technical Analysis - Cocoa Trading: 2021-10-01
Cocoa Technical Analysis Summary
Above 2672
Buy Stop
Below 2571
Stop Loss
| Indicator | Signal |
| RSI | Neutral |
| MACD | Buy |
| Donchian Channel | Buy |
| MA(200) | Buy |
| Fractals | Neutral |
| Parabolic SAR | Buy |
Cocoa Chart Analysis
Cocoa Technical Analysis
The technical analysis of the COCOA price chart on 4-hour timeframe shows #C-COCOA,H4 has breached a resistance line above the 200-period moving average MA(200) which is rising. We believe the bullish momentum will continue after the price breaches above the upper Donchian boundary at 2672. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below 2571. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop-loss level (2571) without reaching the order (2672) we recommend cancelling the order: the market sustains internal changes which were not taken into account.
Fundamental Analysis of Commodities - Cocoa
West Africa cocoa farmers are concerned heavy rains may result in spread of cocoa pod disease. Will the COCOA price rebound?
Above average rainfalls and humid conditions persisted in West Africa in September after wetter than normal weather in August. West Africa collectively supplies two thirds of the world's cocoa crop, with Ivory Coast leading global production. Heavy rains poured last week in Ivory Coast's cocoa growing regions. Cocoa production requires heavy rain with intervals of sunny spells for growing and drying the beans. Many farmers and experts are concerned too much moisture can damage immature pods or trigger a fast-spreading fungal disease called black pod. Expectations of lower crop due to disease damage is bullish for cocoa price. At the same time there is a likelihood heavy rains may result in a longer, better-quality harvest. At the same time the International Cocoa Organization (ICCO) forecast record global production resulting in a supply excess of 230,000 tons anticipated for the 2020/21 cocoa year in its August 2021 Monthly Cocoa Market Report. Expectations of a higher supply are a downside risk for cocoa price.
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