CJ1! trade ideas
Cocoa Futures at ResistanceCocoa Futures showing some signs of rejection at relevant area of Resistance. Also note that climatic volume which makes me think that there may be selling pressure. 3D chart.
Inverse Cocoa weekly long term Wyckoff phases for Inverse Cocoa weekly ,this study is the piece of a puzzle, this piece is saying that the short trend of the inverse of the Cocoa is over and we are in the initial phase of a future trend long, clearly for the future Cocoa it is the opposite, if this study It is correct, if other research confirms it, the future of Cocoa is a down trend for years .
CCH2020-CCK2020 - Breakout on Cocoa SpreadCCH2020-CCK2020
There goes another one of our alerts in the commodity spreads.
In this case it is an intramarket spread on cocoa.
You buy the March futures (CCH2020) and sell the May futures (CCK2020)
After a retracement phase within the seasonal window, the breakout of the Middle Valley level between the two highs took place, thus forming the classic "Double Top".
The statistics of the past 15 years, together with the technical analysis, guide us in mentally positioning the Stop Loss, and in the platform the Take Profit.
SELL LIMIT @-09.00 STOP LOSS @01.00 TAKE PROFIT @-39.00
CCH2020-CCK2020 - Cocoa SpreadWe look as a first thing at the spread indicator which is a trend following indicator and suggests if the direction of the Cocoa spread is bearish or bullish.
When the red line is above the green line the indicator is suggesting that the spread is bearish.
We look at the seasonality indicator as well to receive a confirmation. The seasonality indicator is suggesting that the Cocoa market is 93% bearish.
Because both indicators are bearish, in our opinion an opportunity is coming for traders that are considering to sell the spread CCH20-CCK2020.
We look to our RS indicator to identify support and resistance levels. According to our strategy, the support and resistance can be used respectively to set our take profit and stop loss.
‘Tis the season to be Chocolatey!While you’re enjoying the summer sun and clear skies back in SA paradise…
I’m afraid I’m not.
I’m trying to keep warm sitting inside a local restaurant in Greece with a cup of hot chocolate while I search for my next trade.
And surprise, surprise, cocoa popped up on my radar…
Here are three reasons why I’m buying cocoa and where I expect it to head next.
Reason #1: We are all buying
We are literally one month away from celebrating yet another Christmas.
And this is the top time of year where you, me and countless consumers will be buying chocolates.
This increase in demand, will have a positive impact on the price of cocoa…
Here’s a statement that Jack Scoville, analyst at Chicago’s Price Futures Group for “soft” commodities, has to say that coincides perfectly with the season:
“The weekly charts for cocoa imply that a significant rally is possible over the next few weeks,”
Reason #2: Thank the weather
Did you know two-thirds or 60% of the world’s supply of cocoa beans come from West Africa each year. This includes the Ivory Coast and Ghana.
You see, as cocoa is an agricultural commodity – the demand, supply and prices all have an impact based on the weather conditions and crop diseases that prevail.
Jack Scoville mentioned, for the incoming produce, that the harvest was active this week in the world’s largest growing region of West Africa, with good volume and quality.
It was also confirmed that the weather was also great for produce, due to the rain levels that West Africa received.
Jack then added, “The weather in Ivory Coast has improved due to reports of frequent showers.”
“The precipitation is a little less now so there are no real concerns about disease. Ideas are that the next crop will be very good. Both Ivory Coast and Ghana are doing what they can do boost cocoa prices.”
Reason #3: A new surcharge to boost the cocoa prices
This surcharge will have more of an impact than you think. Take the leading cocoa manufacturers including Hershey, Mars, Ferrero Group, Nestle etc…
Them and other companies depend on supplies from the Ivory Coast and Ghana for the beans.
This new premium will not only lead to a rise in price but also a further increase in cash flow, production, create sustainability and will allow farmers to boost wages for their workers.
And so the chocolate manufacturers have supported the two nations decision to add the $400 per ton surcharge.
Now let’s get into the charts…
Looking at the above daily chart of the spot Cocoa Futures price, we can see that since March 2019 the price has been moving in a sideways range between $1,640 and $1,940 (Shaded area).
Each time the price touched the $1,940 high, it then retraced back ended up making an even higher low.
This has formed what’s known as an Ascending Triangle.
This positive formation shows prices touching the same high while making higher, low prices, until there is a upside breakout.
This took place last week (red shaded area), which confirmed there was a lot more upside to come.
In fact, we can now expect the upside momentum to continue which will take the cocoa futures price to the next high - See the analysis above...
COCOA: On a multi month Higher High. How to trade it.Cocoa has been trading on a multi-year Channel Up since May 2017 with the 1D chart trading near the overbought territory (RSI = 70.555, MACD = 51.220, Highs/Lows = 144.4643).
If the Channel stays intact then the price should pull back towards the 1D MA200 for a Higher Low near 2,365. If however it breaks as it did in March 2018 then it can easily reach 2,940 which is the 2 year high. We have identified 2,700 as this break out point. You may trade accordingly with a tight SL.
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COCOA BULLISH BIAS Ok Leo, do you want me to buy something that is already at a supply zone? That’s exactly what I am telling you to do, and why? Well mainly because big speculators, aka “smart money” just turn net long at this!
Ok, so I just go long at the market? Not so fast, There’s a big supply zone one weekly and price will react from that point. So you can adopt two behaves:
Conservative
Aggressive
CONSERVATIVE:
You will wait for the breakout of the supply zone and enter at the pullback
AGGRESSIVE
Yes, you will take at market, try to work your order as these markets do not have a lot of liquidity or you can get a big spread and slippage.\
July COCOA Contracts SHORTPrice action play into support. Close today signifies a short trigger; 2 contract entry separate orders one with target at support other as trailing stop incase market decides to run to the downside.
Cocoa BullishCocoa analysis:
Seasonality: usually Cocoa advances mid April, but the real surge begins Jun, though Cocoa seems interestingly very bullish with respect to its seasonality
1- COT : commercials where extremely long
2- Open Interest : commercials holding their shorts in consolidation after an impulse leg
3- Backwardation : nearby contract is trading at a Premium compared to next contract (somebody is willing to pay more for his Cocoa)
4- A down close candle on daily (an Order Block ) has been created = more buying ?
* If April 15 closes above 2434 the order block is validated
5- Targets are: 2490/2720
Cocoa Buy & ShortCocoa is a buy at the moment but there are also short opportunities to be had once we reach the top.
DISCLAIMER
Please note that this chart is an opinion based chart only. Please trade at your own risk
Cocoa: Pending sell opportunity.Cocoa is currently trading on a 1D Channel Down (MACD = -26.310, Highs/Lows = -32.7143, B/BP = -53.5400) about to price its Lower Low. We have a pending short order on the 3rd estimated Lower High, which based on the previous channel's should be printed. TP = 2100.
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#COCOA $COCOA scenario1. main scenario is retrace to $2200 then go upward to $2600.
2. if it holds $2350(current TL), it is possible to see straight up to $2600
My feeling is the former as stochastics/PMO/MACD are all going downward so healthy pullback is due.
#cocoa $cocoa cycle analysisCOCOA hit resistance zone and could retrace to $2200 level then we go north.
