One way for traders to succeed is to focus on less-focused assets. Cocoa is one of them.

Regularly, you will never find any news on Cocoa in major publications like Wall Street Journal, Bloomberg, and Financial Times.

Cocoa is a commodity mostly supplied by West African countries of Ghana and Ivory Coast. Its global demand is rising as Asian countries like China and India start to explore a product that has been favorite for Europeans and Americans in the past.

In West Africa, supply is rising as technological advancements make it easier to grow, collect, and move the cocoa beans.

The weekly chart below shows that the price of cocoa per tonne peaked at $3428 in June 2015 before starting a major decline to $1760 in June this year.

The decline can mostly be attributed to three factors. First, as mentioned, the supply from West Africa has increased. Second, the demand for cocoa has not been as higher as investors expected. Third, the drop coincided with a similar decline in other commodities.

Couple all this with the impact of Brexit. Cocoa is mainly traded in London making the pound its default currency. As the GBP/USD chart below shows, since Brexit, the pound has fallen from 1.5024 to the current 1.3379.

From August this year, the price of Cocoa started to climb making higher lows and higher highs. It rose from $1823 to a high of $2235 on 10th November as shown.

Then, all the gains it had made disappeared in December when it fell from the previous highs to a low of $1845.

From 7th December, Cocoa has been struggling to find direction. Its price has ranged between $1912 and $1947. The $1947 price forms the 23.6% Fibonacci retracement level.

At the current chart arrangement, I believe the price is poised to move higher. As shown the ADX indicator – which measures the strength of an indicator – has lost its momentum in the past trading sessions from a high of 65 to the current 28. Also, considering it is trading below the 50-day moving average, there are chances that it could move close to close the gap.

However, at these levels, it may go both ways, especially with the current RSI level. As shown, the RSI is currently at 51 which indicates a neutral market.