Trading Ideas

September 16, 2011 5:17 pm

Updates: Gold and cocoa

I called on August 20 for a decent correction in gold, which I saw as having gone too far, too fast. It subsequently made a high at $1,918 per ounce on 23 August, before plunging to as low as $1,705 just two sessions later. It subsequently repeated this trick, surging to $1,924 and then retreating to $1,775 this week. I would still like to see it come back to, say, its 34-week exponential moving average at $1,580 in order to eliminate the speculative froth that has accumulated – and set up a major buying opportunity. Once the next leg of its bull market gets under way, I see it heading to $2,300 and ultimately well beyond.

More

Trading Ideas

I said on April 23 that I would fancy going long of cocoa were its price to bounce off its 200-week exponential moving average. That moment is finally now at hand. After several months of gentle decline, cocoa is within a whisker of that line, which currently is at $2,750 per tonne. If it now rallies from this area, I will buy – placing a stop loss below the low of the decline. I continue to project that cocoa could regain its highs of March this year at $3775. Beyond there, significant objectives lie at $4,130 and $4,405.

Copyright The Financial Times Limited 2014. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

SHARE THIS QUOTE