Cocoa Commodity Elliott Wave Technical Analysis

Cocoa futures are experiencing a sharp decline in late May, erasing much of the progress achieved earlier in the month. This price action indicates the continuation of the bearish trend that began in December 2024. If the high recorded in May remains unbroken, the next target could be a drop toward the 5980 support level. Based on Elliott Wave Theory, this downward move represents a corrective wave following the five-wave rally that originated in June 2020.

Cocoa Long-Term Forecast and Daily Technical Outlook

Cocoa prices have been in a long-term bullish trend since May 1992. The initial primary wave, marked as wave ((I)), concluded in March 2011. Afterward, a corrective wave ((II)) unfolded and completed in March 2017. Since then, wave ((III)) has been advancing steadily. Within this cycle, sub-wave III of (III) of ((III)) peaked in December 2024. A downward correction labeled wave IV started from this peak. The wave ((A)) segment of IV completed a five-wave pattern by April 2025. A zigzag corrective formation identified as wave ((B)) ended on May 20, 2025. The price is now projected to continue lower in a new five-wave sequence, targeting the 5980 to 3952 range as the next support zones.

Cocoa 4-Hour (H4) Chart Technical Analysis

The H4 timeframe highlights that wave ((B)) concluded near a key resistance zone, providing a technical entry point for sellers. Currently, cocoa is in wave (1) of ((C)), and prices are expected to decline further with minor bullish retracements. As long as the price action remains below the May 20 high, the downward momentum is likely to persist, reinforcing the bearish outlook toward the 5980 level over the short term.

Technical Analyst: Sanmi Adeagbo

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