COCOA pushes through key technical resistance level
Cocoa (COCOA) Technical Analysis Report for May 22, 2020 | by Techniquant Editorial Team
COCOA finished the week -0.04% lower at 2382.0 after gaining $44.0 (1.88%) today on high volume. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (COCOA as at May 22, 2020):
Friday's trading range has been $88.0 (3.78%), that's above the last trading month's daily average range of $63.4. Weekly volatility is also higher, being above the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for COCOA.
One bullish candlestick pattern matches today's price action, the White Candle.
Buyers managed to take out the key technical resistance level at 2376.0 (now S1), which is likely to act as support going forward. After having been unable to move lower than 2326.0 in the prior session, the contract found buyers again around the same price level today at 2318.0. The last time this happened on Wednesday, COCOA actually lost -2.70% on the following trading day.
The trend is clearly bearish, showing an intact downtrend in the short, medium and long-term.
Among the four market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Low close to previous low" stand out. Its common bullish interpretation has been confirmed for Cocoa. Out of 611 times, COCOA closed higher 50.41% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 52.05% with an average market move of 0.11%.
With five out of the other five Consumer Commodity Markets closing lower today, the ones that stand out on the negative side are COFFEE losing -1.05% and LUMBER closing -0.91% lower. None of the markets managed to end the day in the green. Read more