Dec. 23 (Bloomberg) -- Cocoa may rise 18 percent by the end of next month after forming a “bullish flag,” according to technical analysis by Hackett Financial Advisors Inc.
The attached chart shows New York cocoa prices in a flag formation since the start of this year. It suggests “a major bullish price spike” for cocoa in 2011, Shawn Hackett, president of Boynton Beach, Florida-based Hackett Financial, wrote in a Dec. 18 report. Cocoa futures for March delivery in New York closed yesterday at $2,970 a metric ton on ICE Futures U.S. Prices rose to a 30-year high of $3,510 on Dec. 16, 2009.
“By the end of January this bullish flag pattern should break out to the upside,” Hackett said by phone on Dec. 21. “We would at least see a re-test of the prior high.”
Cocoa has climbed 5.8 percent this month on speculation unrest in the Ivory Coast, the world’s largest producer, will disrupt exports. Presidential incumbent Laurent Gbagbo and challenger Alassane Ouattara asserted victory in the Nov. 28 vote. Cargill Inc., the biggest closely held U.S. company, has removed its expatriate employees from the country.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index.
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