SINGAPORE: New York cocoa may rise into a range of $2,821-$2,993 per tonne next quarter, driven by a wave C.
This wave started at $2,092. It consists of three smaller waves.
The first wave labelled a ended at $2,821.
The wave c is expected to be equal to the wave a, to travel into the target zone.
A trendline falling from $3,775 points at $2,993 as well.
This wave C, along with the preceding wave A and wave B, has developed within a rising wedge.
It is hard to decide the nature of this pattern, which could be bullish, if the resistance at $2,993 is broken, or bearish, if cocoa fails to break $2,993 but falls towards $2,370 thereafter.
Even though it is clear that cocoa could rise towards $2,993, the unclear part is whether it would retreat into $2,370-$2,682 range before resuming the uptrend, as the moves within the wedge look very zigzagging.
The rise seems to have lost its momentum around the resistance at $2,682, which is highly likely to trigger a correction.
On the daily chart, a small five-wave cycle ended around a key resistance at $2,719.
A correction towards the bottom of the wave iv around $2,546 has started.
The correction could extend to $2,440, if it is classified as a pullback towards a short falling trendline.
A break above $2,719 could confirm the continuation of the uptrend.
Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.