Commodity Chart Of The Day
(click image to enlarge)
This week, cocoa prices came very close to challenging their January highs, failing just a few dollars short, as seen in the chart above. Prices are off 3% in the last three sessions, as it appears they are making their way lower.
My suggestion is to have bearish exposure in this contract, as long as prices remain under 2500. Use the Fibonacci levels as your downside targets. A 50% Fibonacci would drag prices back under 2300, a level last seen in late July. If the U.S. dollar finds its footing, do not rule out a trade under 2200.
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Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.