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Cocoa Technical Analysis - Cocoa Trading: 2020-05-06
Cocoa Technical Analysis Summary
Above 2420
Buy Stop
Below 2200
Stop Loss
| Indicator | Signal |
| RSI | Neutral |
| MACD | Buy |
| MA(200) | Neutral |
| Fractals | Neutral |
| Parabolic SAR | Buy |
| Bollinger Bands | Buy |
Cocoa Chart Analysis
Cocoa Technical Analysis
On the daily timeframe, COCOA: D1 is located near the neutral trend resistance line, which must be breached up before opening a position. A number of indicators of technical analysis formed signals for a further increase. We do not exclude a bullish movement if COCOA rises above the last upper fractal and the upper Bollinger line: 2420. This level can be used as an entry point. We can set a stop loss below the Parabolic signal, the lower Bollinger line and the last two lower fractals: 2200. After opening a pending order, we move the stop loss following the Bollinger and Parabolic signals to the next fractal minimum. Thus, we change the potential profit / loss ratio in our favor. After the transaction, the most risk-averse traders can switch to a four-hour chart and set a stop loss, moving it in the direction of the trend. If the price meets the stop level (2200) without activating the order (2420), it is recommended to delete the order: market sustains internal changes that have not been taken into account.
Fundamental Analysis of Commodities - Cocoa
Ghana Cocoa Board lowered its forecast for cocoa in Ghana in the 2019/20 agricultural season to a 4-year low. Will COCOA quotes grow?
According to the Council, the cocoa harvest in Ghana will amount to 780 thousand tons, which is less than its October forecast of 800 thousand tons. From October to mid-April, cocoa exports from Ghana fell by 0.9% over the same period of the previous season. Ghana is the 2nd largest cocoa producer in the world after Côte d’Ivoire. Together, these two countries provide slightly less than 70% of the global cocoa crop. From October to early May, cocoa exports from Côte d’Ivoire amounted to 1.89 million tons, which is only 1.1% more than in the same period last season. Meanwhile, quarantine due to the coronavirus pandemic has caused an increase in demand for chocolate products. According to the US marketing agency Nielsen, chocolate and cocoa sales in the United States since the beginning of the year increased by 5.7%. The European Cocoa Association reported an increase in cocoa processing in Europe in the 1st quarter of 2020 by 0.9% to 373.6 thousand tons compared to last year. This is the maximum volume observed in the 1st quarter since 2003. Note that cocoa quotes are highly dependent on the weather in West Africa.
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