Limited Downside in Cocoa
12 March 2009
After a February high, around a 76.4% resistance level, the market has enjoyed quite a deep correction. However, an interesting support area has now been neared (including another 76.4% level) and a rebound phase may not be far off now.
MONTHLY CHART – CONTINUATION: The 76.4% level of the 2004-2008 rise, near 1800, currently underpins the market. It is close to old highs from 2003/2005 –reaction here was very positive.
DAILY CHART – MAY-09: The 76.4% resistance area was a former target – the subsequent pullback has been deep. We are currently looking at the key support area around the 76.4% 2148 retracement, noting the old falling resistance/return line now near 2100 too. We remain on the lookout for a rebound from this key area – first upside target would be the 2466 26-Feb high area. Any buyers towards the 2148 76.4% level will likely favour initial stops below that return line, below 2100 currently.
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