Parabolic Cocoa

The parabolic move of the year (so far) goes to Cocoa.

Historically, such parabolas are usually thumped and mean reversion is honoured quickly.

The most recent #parabolic price moves were seen in Natural Gas and Wheat in the earlier phases of the Russian/Ukrainian War.

The attached monthly chart goes back to 1984.

The Empirical Rule states that 99.7% of data or prices observed following a normal distribution lies within 3 standard deviations.

Today, #cocoa is at 3.5 standard deviations.

While the upward move is astonishing, but I do wonder, with such probabilities, who is buying Cocoa at such prices?

Other extremes are seen in the distance above moving averages and the width of the Bollinger bands.

In the meantime, the stock prices of Hershey, Nestle and Barry Callebaut are wallowing at their recent lows.

March 16, 2024

by Rob Zdravevski

rob@karriasset.com.au