(This is an excerpt from an article I originally published on Seeking Alpha on March 14, 2017. Click here to read the entire piece.)
{snip}…a volume surge and a gap up in NIB makes it a LOT more likely a bottom is finally forming in NIB (and by association cocoa prices). NIB closed the day with an impressive 4.5% gain.
Source: FreeStockCharts.com
The day after I posted “Trading Cocoa: A Declining Price Takes Its Toll But Brings Opportunity“, The International Cocoa Organization (ICCO) posted its first forecast for the 2016/2017 production year. {snip} The volume on March 13th was the sixth largest trading ever for NIB.
The bottoming process still needs technical confirmation with a close above the downtrending 50-day moving average (DMA) (the red line in the above chart). NIB has failed to challenge and close above this downtrending line of resistance since August, 2016.
The main news on the day that could explain the sudden jump was a significant forecast cut from Ghana’s governmental cocoa regulator: Cocobod. {snip}
Be careful out there!
Full disclosure: long NIB
(This is an excerpt from an article I originally published on Seeking Alpha on March 14, 2017. Click here to read the entire piece.)