Improved Cote d'Ivoire crop forecast bearish for cocoa prices
Cote d'Ivoire cocoa harvest is expected to rebound without El Nino re-emergence. Will cocoa prices continue falling?
On the daily timeframe the COCOA: D1 has been falling after hitting year to day high in late March and has fallen below the 50-day moving average MA(50).
- The Parabolic indicator gives a sell signal.
- The Donchian channel is tilting lower, signaling start of downtrend.
- The MACD indicator gives a bearish signal.
- The stochastic oscillator is in the oversold zone, which is a bullish signal.
We expect the bearish momentum will continue after the price breaches below the lower Donchian bound at 1901.00. This level can be used as an entry point for a pending order to sell. The stop loss can be placed above the the fractal high at 2107.00. After placing the pending order, the stop loss is to be moved to the next fractal high, following Parabolic signals. By doing so, we are changing the probable profit/loss ratio to the breakeven point. If the price meets the stop loss level (2107.00) without reaching the order (1901.00), we recommend canceling the position: the market sustains internal changes which were not taken into account.
Summary of technical analysis:
| Position | Sell |
| Sell stop | Below 1901.00 |
| Stop loss | Above 2107.00 |