Cocoa is riding on a wave C, the third wave of a three-wave cycle that started at the Sept. 25 high of $3,399. This wave has not yet completed, as it will consist of five small waves. So far, only four have unfolded.
A Fibonacci projection analysis reveals that the wave C has been disrupted by a support at $2,893, the 76.4 percent level, the rebound triggered by which has been driven by the fourth small wave, wave 4.
The final wave labeled 5 may start around $2,947, the 61.8 percent level and then travel towards the 100 percent level at $2,806.
Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.