NY cocoa may drop into $2,968-$2,981 range

SINGAPORE: New York May cocoa may fall more into a range of $2,968-$2,981 per tonne, as indicated by a Fibonacci retracement analysis.

The drop from the March 3 high of $3,038 is apparently against the short uptrend from $2,924. A Fibonacci retracement analysis on the trend reveals a support at $2,994, the 38.2 percent level, which may not hold the drop, as this drop consists of three waves.

The third wave labelled c is expected to travel a similar distance as the first wave, to arrive at $2,981, the 50 percent level. However, the wave c may extend as well, to arrive at $2,968, the 61.8 percent retracement.

Resistance is at $3,011, the 23.6 percent level, a break above which could signal the continuation of the uptrend towards $3,038.