Cocoa futures exploded higher in Tuesday's trading session to gain nearly $130 per metric ton for the day. This surge triggered a technical breakout from the Triangle chart pattern shown here on Autochartist's 240-minute time interval. Given the extraordinary momentum of the move so far, it is likely we will see a continuation of the move towards the forecast target price in Wednesday's session.
Cocoa had been trading in a mostly sideways range for the last several weeks, bouncing between the support and resistance levels created by the Triangle chart pattern. The clear violation of the resistance trend line as the surge occurred found immediate and sustained buying action to carry the market much higher by the close.
The minimum projected price to complete this breakout suggests another $50 per ton of upside potential to reach $2,466 per ton. Momentum buying will often carry a move above the minimum target, however, suggesting a follow-through towards the upper end of the range near $2,540 per ton is quite possible.
Any sell-off from the present level should find solid footing at the top of the Triangle, as old resistance becomes new support. The impressive strength of the rally now underway is encouraging for a longer term bull market trend towards $3,000 per ton to ensue upon a successful achievement of the nearby price target. For further information on this and other Autochartist products, visit our website at
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