MY COCOA LONG IDEA 01/11/2024

1. Nov.

*Did not enter this trade yet*
Direction: Long
SL: 7425.4

Indicators:
1. MA (20,50,100,200)
2. Trendline - Algo
3. Support and Resistance
4. I also use MT5 - Tradingcentral tools
5. Fib

Time Frame: 4h (I also use other time frames mainly 1D because I like to trade for long period of time)

Technical:
1. MA 20 (Yellow) is very bearish and below the MA 100 and 200 (Purple and Red) but I expect a reversal in this pattern.
2. Red trendline was broken previously so I'm looking for a breakthrough the green trendline.
3. Price respected the Support zone and is rising towards the fib level at 8216.2.
5. Tradingcentral tool signaling RISE on all time frames signifying a very bullish Price action.

Fundamental and economic:
1. COCOA is a very tricky commodity but we can simplify this by looking at the COT data where they were short about 1-2 weeks ago making a short-term bearish setups and I think we are past that phase because in the long run COT is bullish on COCOA.
2. Q4 historically is bullish for this pair according to the seasonal indicator by Tradingview.
3. US Elections, Halloween, Winter season, and Christmas is an influence in the Demand of Cocoa.

16. Nov.

Trade ist aktiv

Update:
Hello,
Unfortunately I am not in this trade but it was such a good setup. I am however keeping this as "Active" because if I were in it I would still keep it open. A user reached out to me and was asking about shorting this position and I gave the following answer,

"Well if it is COCOA vs USD shorting from 7900 is logical but I can't say for sure if the price will continue going up or it will start reversing. My fundamental analysis tells me that during this quarter we will notice a short bullrun, which we had recently, and after the holiday season is over we will notice a slightly bearish market on the cocoa due to seasonality factor. It is Cocoa supply season so it is logical to short the cocoa.

According to tradingeconomics the cocoa is struggling with the supply seasonality due to weather conditions and some issues regarding deforestation. This gives a +1 point for demand hence why the price is increasing. There are also other factors such as the US elections that plays a role in this alongside with the rate cut condition which could come to a halt. As of now the world is at 50-50 unsure whether we will get a rate cut or not.

tradingeconomics.com/commodity/cocoa

CME group at the moment, is uncertain about having a 25 bps rate cut they are expecting a delay.

cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html