We look as a first thing at the spread indicator which is a trend following indicator and suggests if the direction of the Cocoa spread is bearish or bullish.
When the red line is above the green line the indicator is suggesting that the spread is bearish.
We look at the seasonality indicator as well to receive a confirmation. The seasonality indicator is suggesting that the Cocoa market is 93% bearish.
Because both indicators are bearish, in our opinion an opportunity is coming for traders that are considering to sell the spread CCH20-CCK2020.
We look to our RS indicator to identify support and resistance levels. According to our strategy, the support and resistance can be used respectively to set our take profit and stop loss.
When the red line is above the green line the indicator is suggesting that the spread is bearish.
We look at the seasonality indicator as well to receive a confirmation. The seasonality indicator is suggesting that the Cocoa market is 93% bearish.
Because both indicators are bearish, in our opinion an opportunity is coming for traders that are considering to sell the spread CCH20-CCK2020.
We look to our RS indicator to identify support and resistance levels. According to our strategy, the support and resistance can be used respectively to set our take profit and stop loss.