Coo Coo for Cocoa: March Cocoa Futures
The recent selloff in the cocoa futures from the highs set on December 10th appears to be the terminating 5th wave of the sequence. Currently I do not believe this wave to be complete and see more downward pressure in the short term. My targeted zone converges level comes in underneath at +/- 1720. This also coincides with the 1.272 extension target. From here I’d be on the lookout for structural and momentum indicator clues to determine any terminating price action. If this were to develop I would be suggesting option strategies to take advantage of any rebound. My first upside target zone would be the 4th wave high of +/- 2200 which is solidified by the convergence of channel and pitchfork lines (cross). Looking into next year my long term objective would be for an extended recovery to unfold rising as high as +/-2650. My time study points to a bottom developing around late January.
My analytical breakdown focuses on a blend of wave pattern recognition, long and short term geometrical extensions and momentum signal interpretation. I welcome you to contact me at Walsh Trading to discuss my assessment of this and any other market.