Cocoa Elliott Wave AnalysisSince it reached a record high of 11,722 in April 2024 cocoa prices have been correcting lower. A few months after reaching that high, the commodity shed about 40%. Clearly, the sell-off from April 2024 is correcting the resurgent impulse sequence from September 2022.The price completed an impulse wave rally from September 2022 on the daily chart. The impulse wave cycle reached an all-time high in April 2024 when the current correction to the downside started. The decline from 11,722 is corrective structurally as a double zigzag emerges. Wave W finished in August 2024 and a bounce for wave X started before ending in late September 2024. The decline should extend lower in wave Y toward the 5,000 major level.
Alternatively, if the decline ends above 6,000 and is followed by a corrective bounce, we can call for a leading diagonal in wave A for the decline from 11,722 and the resultant bounce as wave B. Then, wave C decline should follow to 5,000 or below. Thus, the medium-term path favors the downside of Cocoa.On the H4 chart, the current bounce is wave ((b)) of Y. Another leg lower is expected for ((c)) of Y to 5,000 or below.
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