(Bloomberg) -- Cocoa has “explosive upside potential” in coming months as a 10-month triangle formation nears completion, according to Barclays Capital.The September cocoa contract in New York may climb to $3,385 a metric ton if prices exceed February’s high of $2,899, MacNeil Curry, New York-based technical analyst at Barclays, wrote in a report yesterday. Cocoa for September delivery was at $2,608 a ton at 9:30 a.m. in London.
The chocolate ingredient’s price jumped 63 percent in the past two years as global production led by growers in the Ivory Coast and Ghana lagged demand, according to estimates by the International Cocoa Organization. The deficit will be 64,000 tons in the upcoming 2009-10 season, Fortis forecasts.“The combination of the larger, ongoing secular bull trend and the potential completion of a 10-month triangle formation indicates explosive upside potential in the months to come,” Curry wrote.
On a weekly chart, the September cocoa contract has traded between $1,950 a ton in October and $3,327 a ton in July, when the 10-month triangle began, Dhiren Sarin, a Barclays technical analyst in London, said by phone today.“The market has been consolidating for 10 months,” Sarin said. “When you break out of that range, it’s a bullish shift in market psychology, especially since the preceding trend was bullish.”
No comments:
Post a Comment