Cocoa Short: Completed wave 2 (or B) rallyI've previously publish an idea for Cocoa long because of ending diagonal. But it should be clear to an EWer that the down move was a 5-wave structure and thus the long idea was a wave 2 or B idea. Now that we have completed 3-waves up for Cocoa, I think it's time that Cocoa resumes it's down move again. The conservative target is set at the previous support, but I certainly expect it to move way below that target.
CJZ2026 trade ideas
LONG FUTURE CACAO Hello everyone, today I’m sharing my analysis on cocoa futures, as I see an interesting opportunity for an upward move. Below, I’ll break down the reasons behind my bullish bias and my entry strategy. Let’s get into the details!
Why I’m Bullish on Cocoa Futures
Institutional and Retail Activity
My indicator is showing an incredible amount of long contracts from institutional players, while retail traders are selling aggressively, which is a bit alarming. Since retail traders often get it wrong, this strengthens my expectation of an upcoming upward move, and I’m looking for a long entry.
Open Interest
My open interest indicator confirms my bias, as all open positions are longs. This signals strong buying interest from the big market players, aligning with my bullish outlook.
Valuation
My valuation indicator also shows a clear undervaluation of cocoa, suggesting that the current price is an attractive opportunity for buyers.
Technical Analysis
The price recently touched a key zone on the weekly timeframe, and in that touch and reaction, it left a zone that, based on my objective parameters, is actionable, as cocoa is at a significantly discounted price. While this move and reaction might not yet change the downtrend on lower timeframes, I can take advantage of this zone for a tactical entry. Let’s recall the principle of supply and demand: I’m placing my entries where institutions have their buy orders, and this is one of those zones.
Additionally, on higher timeframes, I see very significant demand zones below, which suggests a potential upward move that could indeed shift the trend to bullish. However, for this specific entry, I’m aiming for an entry within the next day. If the price drops further, I’ll be happy to buy at an even more refined zone on the weekly timeframe.
My Entry Strategy
I’ll enter a long position in the identified zone, expecting a quick upward move. I’ll keep this idea updated as the price evolves, so stay tuned for more details.
Disclaimer
This is my personal analysis and does not constitute financial advice. Trading carries risks, so always conduct your own research and assess your risk tolerance before making decisions.
The Cocoa Code - Smart Money is Preparing for a Bullish MoveCocoa is setting up for a long trade upon a confirmed daily bullish trend change.
The fundamentals underlying this market suggest a bullish move of some significance is brewing, and would confirm if we see a daily bullish entry trigger.
Commercials at extreme in long positioning relative to last 26 weeks of positioning.
Advisor Sentiment Index at bearish extreme, a great contrarian signal when juxtaposed with the commercials positioning.
Open Interest is at a 3+ year low. Low levels of open interest are generally associated with market bottoms.
Valuation measure against Treasuries & Gold shows Cocoa is undervalued.
True Seasonal tendency for Cocoa to rally into April.
Front month premium implies the commercials want this commodity so bad that they are willing to pay more to acquire it now than later in the future. This implies a commercially driven bull market is at hand.
130 day cycle points to bullish momentum for Cocoa until May.
Accumulation by the commercials is evident via the ProGo & Ultimate Oscillator divergence.
What does this all mean? It means the fundamental conditions underlying this marketplace point towards a bullish move on the horizon.
Long Idea on CC1! (Cocoa)1)Climate change is having a significant impact on cocoa production in West and Central Africa, according to a study by Wageningen University & Research (WUR). The region accounts for more than 70% of global cocoa production. Changes in temperature and rainfall are making some areas less suitable for cocoa cultivation.
2) Seasonality gives us a bullish pattern which is 98% correlated with the actual price
3)quantitative data shows 80% win rate with a good profit factor
4) The price rejected the 50 EMA forming a Pin Bar Candlestick pattern
5) The price also bounced on a demand zone
6) Price is undervalued against several benchmarks
Falling Wedge Pattern: Cocoa FuturesThis is the map of how to trade this rare chart pattern.
This is a textbook sample of Falling Wedge continuation pattern that played out with impressive accuracy.
We have a strong uptrend in 2024 that has been changed
by a large consolidation that took place for the rest of 2024
as it has built the large Falling Wedge (continuation) pattern.
One should focus on the following crucial points and measurements:
1. breakout point where price rises above trendline resistance
it acts as a buy entry trigger (green segment)
2. stop loss - it is located below the lowest valley preceding breakout (red segment)
3. widest part of the pattern - use it to measure the distance to the target adding it to breakout point (blue arc)
4. target (yellow dashed segment)
all of above key parameters are highlighted on the chart.
It's amazing how accurately the price grew towards the target booking over 60% profit.
Next time you can use this map as a guidance.
Can One Bean's Rally Reshape Global Markets?The extraordinary trajectory of cocoa in 2024 has rewritten the commodities playbook, outperforming traditional powerhouses like oil and metals with a staggering 175% price surge. This unprecedented rally, culminating in record prices of nearly $13,000 per metric ton, reveals more than just market volatility—it exposes the delicate balance between global supply chains and environmental factors.
West Africa's cocoa belt lies at the heart of this transformation, where Ivory Coast and Ghana face a complex web of challenges. The convergence of adverse weather conditions, particularly the harsh Harmattan winds from the Sahara and widespread bean disease, and the encroachment of illegal gold mining operations, has created a perfect storm that threatens global chocolate production. This situation presents a compelling case study of how localized agricultural challenges can cascade into global market disruptions.
The ripple effects extend beyond just chocolate manufacturers and commodities traders. This market upheaval coincides with similar pressures in other soft commodities, notably coffee, which saw prices reach forty-year highs. These parallel developments suggest a broader pattern of vulnerability in agricultural commodities that could reshape our understanding of market dynamics and risk assessment in commodity trading. As we look toward 2025, the cocoa market stands as a harbinger of how climate volatility and regional production challenges might increasingly influence global commodity markets, forcing investors and industry players to adapt to a new normal in agricultural commodity trading.
COCOA SHORTCocoa started a correction on Wednesday, after going parabolic.
It is doing an ABCD pattern, with "C" giving us a point for defining a bearish trendline.
The target is "D", 11,147.
A solid close 4H above the trendline, would invalidate this trade idea.
WHAT'S FLOWING: METALS | FX | CRYPTOS | COMMODITIESXPDUSD (Palladium): Bearish outlook. The chart indicates potential resistance around the current price levels, suggesting a downward move may be in play.
AUDCHF: Bullish. Positive price action with upward momentum signals the potential for gains, as AUD strength seems to dominate CHF.
CADCHF: Bullish. Similar to AUDCHF, CAD is showing strength against CHF, pushing higher and creating opportunities for bullish plays
GBPAUD: Bearish. GBP appears to be under pressure against AUD, with price action leaning towards a decline, signaling a potential short opportunity.
JPN225 (Nikkei): Bullish. Japan's index is holding strong and showing signs of further upside, making it a favorable option for long positions.
LNKUSD: Bullish. Link (Chainlink) is experiencing upward momentum, making it a strong candidate for a continuation in price appreciation.
XLMUSD: Bullish. Stellar Lumens (XLM) is also looking strong, with buying pressure indicating potential gains in the near term.
CCZ2024 (Cocoa Futures): Bearish. Cocoa futures seem to be in a downtrend, with bearish signals suggesting lower prices ahead.
Cocoa Crisis 2024 skyrockets prices, outperforming S&P500
The price of cocoa has risen 130% this year, making it the most revalued commodity, surpassing even copper. There are two times of the year when cocoa is harvested, and poor rains and crop diseases have dented the crop in Côte d'Ivoire and Ghana, responsible for more than half of the world's cocoa supply, pushing prices higher.
The latest estimates from the International Cocoa Organization (ICCO) point to a shortfall of 462,000 metric tons, with demand exceeding supply. This is the third upward revision to the shortage this year, driven by adverse weather conditions and persistent demand for chocolate.
Cocoa, which touched an all-time high of $11,800 per tonne in March, is threatening to break above $10,000 again, reflecting a tense and tight market. The cocoa rally not only eclipses other commodities not only food commodities but also some metals such as copper or aluminum, but also outperforms the major stock market indices. This year, the orange is up 55%, a far cry from the 130% rise experienced by cocoa. It is eclipsing the performance of the S&P 500, the world's benchmark index, which has shown a return of around 23% in 2024.
Looking at the chart it can be seen that currently the checkpoint zone (POC) is located around 7660 points and the RSI is located in the middle zone slightly overbought at 51.88%. Seeing the falling formation since April, with two successful attempts to pierce the 8697 points range in May. If this psychological zone is pierced we could see a climb towards highs accompanying the previously mentioned shortage news in a year with many price convulsions.
Ion Jauregui - ActivTrades Analyst
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COCOA LONGCocoa (ICE) price oscillated in a rectangular pattern. Price finally made a breakout, after the breakout the price retraced because it hit the 61.8% golden ratio Fibonacci level (not plotted in this chart), then continued its path upwards.
After measuring the rectangle height, I projected it to define a possible target of 9636 or so.
Then I corroborated this with an ABCD pattern projection, of CD being 161.8% of BC, and having a target of 9636 too.
The Cocoa price can now fall as fast as it rose in six months.The Cocoa price tripled in six months from autumn 2023 to February 2024. So what now? Some have predicted that the Cocoa price will continue to skyrocket? Probably not..
The Cocoa price can now fall as fast as it rose in six months.
Technical Analysis of Cocoa Futures:
If we first look at the short-term picture now for Cocoa futures, then the course is moving within a right-angled descending triangle formation, which indicates further decline going forward both in the short and medium term for Cocoa Futures.
There is now resistance around the USD 8,600 level (cf. chart) and the technical picture signals decline from this level, and a new test soon of the now important technical support level around USD 6,800.
Should there be a break down from the aforementioned right-angled descending triangle formation, and a break down below the now very important technical support level around USD 6,800.
Yes, then a strong technical sell signal will be triggered for Cocoa Futures, which then, and according to the long-term trend (cf. weekly chart) will then be able to fall all the way down towards the lower trend line in the long-term rising trend, and down towards around USD 3,700 (cf. weekly chart).
Important technical levels to watch in the near term for Cocoa futures are whether there should be an established break above the USD 8,600 level, or whether there should be an established break below the USD 6,800 level.
These are two important technical levels now in the short term to keep an eye on for Cocoa Futures, and an established breach of one of these two now important technical levels, yes it will help give new signals about the further development going forward for Cocoa Futures .
As the overall technical picture for Cocoa Futures looks as of today, it is indicated that Cocoa Futures will fall back into the previous uptrend, and have a strong correction down towards the support level at the lower trendline in this long-term uptrend.
That would mean a strong correction down from the current level for Cocoa Futures at USD 8,560 and down towards USD 3,700.