The price of Cocoa continues to rise and betting against the trend of the commodity has likely proven an expensive losing wager for traders who attempted to look for reversals lower.

• The price of Cocoa as of this writing is near 8431.3 USD per metric ton.
• To put this value into perspective the cost of Cocoa in October was around the 3352.0 ratio.
• October’s prices in 2023 were considered a higher range for the commodity, but not one that grabbed headline attention.
• In November of 2023 when Cocoa started to trade above 4000.0 USD whispers started to grow louder that an escalation of values was building, but still there was not hysteria.

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However, Cocoa trading since the 8th of January has taken on a Bitcoin type of feel. Except that while people question the intrinsic value of Bitcoin, the price of Cocoa is not only understood but effects consumers globally. The price of your chocolate is going up. Too put it into perspective the price of Cocoa has doubled since November of 2023.

Surging Prices, Reversals, and Back to Record Highs

Cocoa hit a high of nearly 8540.0 on Monday of this week; yes it reversed lower to 7870.0 USD later in the day, then promptly went higher again, reversed lower and touched a low around 7767.0 yesterday. But then Cocoa burst forward again and is within sight of its all-time highs this morning achieved on Monday. The price velocity of Cocoa is likely melting some speculators.

Traders contemplating a wager in the Cocoa market should consider their ambitions very carefully. The commodity has now entered the terrain of exuberant speculation and is dangerous. Those who want to declare the value of Cocoa is too high, and the price makes no sense are welcome to their opinions, but betting on a downturn to emerge which meet your timeframes may prove damaging to your trading account if momentum continues to push upwards.

Upwards Momentum in Cocoa and the End of the Rocket Ride Higher

For speculators who are betting on additional rocket fueled highs, gambling may be equally dangerous. Day traders need to understand their CFD wagers placed on their brokers’ platforms are not affecting the real price of Cocoa. CFDs are virtual, the real value of Cocoa is only being generated in the cash and futures markets where very large companies and ‘players’ are participating in the commodity. Betting on the price of higher values in Cocoa by day traders needs to be done carefully.

• The price velocity of Cocoa makes it extremely dangerous for small retail traders to pursue; conservative use of leverage is urged.
• The ability of Cocoa to end yesterday’s trading within sight of record highs after testing lows only three hours beforehand is evidence that the price of the commodity remains highly volatile.

Cocoa Short Term Outlook:

• Current Resistance:  8449.0
• Current Support:  8392.0
• High Target:  8575.0
• Low Target:  8110.0

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