The cocoa future scored an impressive rally since the beginning of october. Now, it seems the rally has reached an exhaustion point and in our opinion could begin to roll down.
First of all we can observe the pace set by the circle brackets, which shows us that we should be in proximity of a reversal point.
Furthermore, observing the seasonality, we note that expectations are bearish.
Finally, we look at candles and volumes:
- on November 12, we observe high volume appearing, with a narrow spread. This is a strong sign of weakness;
- yesterday, on November 17, we can recognize an upthrust, another clear sign of market weakness.
Cocoa could be close to a top. Do you?....
Remember: this is not a trade solicitation and, if you decide to trade, you do it at your own responsibility.