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Sweet melt up potential here says Joe Friday

Courtesy of Chris Kimble

Tis the season for Chocolate (Cocoa) to do well, will it repeat its historical pattern again this year?

Below looks at the seasonal pattern of Cocoa from Sentimentrader

Going into this period of seasonal strength, Cocoa bulls of late are hard to find and dumb money traders have established one of the largest short positions in this commodity in years. The triple combo could make the price action of this commodity very interesting going forward.

This commodity can be played in the futures markets or two different ETF’s (NIB & CHOC). Below looks at NIB.

Cocoa ETF NIB could have built a base at, where seven different bullish wicks (reversal wicks) took place just above 10-year support at (1). Of late NIB has been moving higher and this week looks to be breaking above highs hit earlier this week at (2).

A nice combo of pattern, sentiment and traders positions is in play in this asset that is down nearly 50% in the past couple of years.

Some perspective- since the first of this month, NIB has gained over 7%, which is nearly half of what the S&P has done year-to-date.

Full disclosure Premium and Sector members have been long NIB since the end of October. If you would like to become aware of these type of pattern and sentiment setups, we would be honored if you were a member.

Why you see chart pattern analysis with brief commentary: There is a ton of news and opinions about markets and stocks that make the decision-making process more difficult than it needs to be.   

I believe the Power of the chart Pattern provides all you need to see what is taking place in an asset and determine the action to take. 

This approach has worked well for me and our clients and I encourage you to test it for yourself.

Receive my free research posted on the blog daily here 

Or, send an email if you would like to see sample research and take me up on a trial of my premium or weekly research where I provide actionable alerts on breakouts and reversals in broad market indices, sectors, commodities, the miners and select individual stocks.  Email services@kimblechartingsolutions.com  

Website: KIMBLECHARTINGSOLUTIONS.COM 


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