Cocoa futures in the May contract are currently trading higher by 10 points at 2144 continuing its bullish momentum hitting a 3 month high looking to retest the contract high that was hit on November 10th at 2235 in the coming days ahead.

I have been recommending a bullish position over the last couple months from around the 1990 level and if you took that trade the stop loss remains at 1991 as the chart structure will not improve for another 5 trading sessions as the monetary risk will remain the same.

Cocoa prices are trading above their 20 and 100 day moving average as the trend clearly is to the upside despite the fact that the U.S dollar is up about 60 points in today's trade, but is not putting pressure on this commodity as harvest has finally come to an end in West Africa as that is a great thing to see as harvest pressure should be completed.

I will be looking at recommending another bullish position once the chart structure tightens up or possibly adding if cocoa prices retreat so keep a close eye on this market in the next couple of days as I still think higher prices are ahead. At the present time this is my only soft commodity recommendation as the rest of the sector continues to drift lower except cotton prices which are sharply higher in today's action, but the strongest trend clearly is cocoa.

TREND: HIGHER

CHART STRUCTURE: SOLID

VOLATILITY---LOW