In today’s analysis, I would like to discuss COCOA, a commodity we’ve highlighted several times on our portal. Recently, COCOA appears to be making a solid return to its bullish trend. Earlier this year, COCOA experienced a strong upward movement, peaking in mid-April. Since then, a corrective phase has taken place, establishing key horizontal support at $7,050. Most notably, a descending triangle has formed on this support, characterized by the horizontal support at $7,050 (marked in yellow) and a descending resistance line (marked in orange).
This setup typically signals a potential breakout to the downside. However, contrary to expectations, COCOA broke through the descending resistance yesterday, signaling a bullish reversal. This breakout paves the way for a corrective upswing, with the initial target set on the white downtrend line. It’s important to note that the key support remains in the yellow area, around $7,050. As long as the price stays above this support, the sentiment remains positive.
In conclusion, the sentiment for COCOA is bullish, with the breakout suggesting a possible upward movement. However, traders should be cautious. A daily close below the yellow support area would negate the bullish outlook and serve as a strong sell signal.
