Cocoa futures executed a downside breakout in Monday's session to confirm the first sell signal of the recent strong rally. After gaining nearly $500 per metric ton during the last half of January, profit taking near the $2,500 level has completed a Rising Wedge chart pattern with the breach of support illustrated here by Autochartist. This Rising Wedge spans the entire price range of the rally and terminates at the breached support level near $2,350 per ton. The sell signal was generated at this level, maintaining a high degree of technical clarity but lacking in momentum.

The minimum projected price is $2,199 per ton and the bottom of the forecast shows a possible 100% retracement of the uptrend to carry the market back below the $2,000 level.

While this is a short-term bearish pattern, the gains in cocoa so far this year have been extraordinary. The potential remains quite high that this pullback will prove to be a buying opportunity in the longer term. Traders playing the short side should maintain stop-loss orders in the event of a sharp reversal once the breakout is complete.

For further information on this and other Autochartist products, visit our website at www.autochartist.com

DISCLAIMER: The Autochartist service includes chart pattern identification in respect of foreign currencies, commodities, equities and stocks. There are potential risks relating to investing and trading. You must be aware of such risks and familiarize yourself in regard to such risks and to seek independent advice relating thereto. You should not trade with money that you cannot afford to lose .The Autochartist service and its content should not be construed as a solicitation to invest and/or trade. You should seek independent advice in this regard. Past performance is not indicative of future performance. No representation is being made that any results discussed within the service and its related media content will be achieved. All opinions, news, research, analyses, prices or other information is provided as general market commentary and not as investment advice. Autochartist, MDIO Software, their members, shareholders, employees, agents, representatives and resellers do not warrant the completeness, accuracy or timeliness of the information supplied, and they shall not be liable for any loss or damages, consequential or otherwise, which may arise from the use or reliance of the Autochartist service and its content. This e-mail may contain information that is confidential. If you are not the intended recipient, you must not distribute, copy, circulate or in any other way use or rely on the information contained within the entirety of this email. Please delete the e-mail and any attachments and notify us immediately.