Chart of the Day: Cocoa loco
No doubt you've heard that commodities are depressed and are dragging down emerging market economies; some aren't though. Cocoa has been a secular bull move since 2000 as more of us enjoy a nibble. Production this year has suffered from drier than usual conditions caused by El Niño so the active futures contract is currently trading at US$3,366 per tonne on the ICE exchange - and looks set to burst through long-term resistance at US$3,400. This will probably trigger a short squeeze to US$3,600 and maybe 2011's high at US$3,825. Depending on momentum we might even see a massive but brief spike to US$4,700.
Nicole Elliott is a technical analyst