March cocoa futures on the New York Board of Trade on Tuesday hit a fresh five-month high of $1,694 a ton. On Wednesday morning the market is seeing some profit-taking pressure from recent strong gains, but no technical damage has been inflicted. In fact, price action the past week can be considered a “pause,” whereby prices have traded in a general sideways fashion on the daily bar chart, after a recent strong surge higher of around $200 from the November low.
March cocoa futures have been trending higher since a contract low of $1,433 was scored on Oct. 12. However, for the cocoa bulls to gain fresh upside near-term technical momentum, they will have to push prices above solid chart resistance at this week’s high of $1,694.
click the chart to enlarge
The cocoa bears would gain a bit of fresh downside technical momentum by pushing March futures prices below chart support at this week’s low of $1,643. Serious technical damage would occur to the cocoa market if March futures prices dropped below solid technical support at the $1,580 area.
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