With a large contingent of commodities moving higher, Cocoa (CC) has been an outlier in May. After reaching a swing high of 3240, on the July contract, the price has fallen to a swing low of 2890 as of May 18. That swing long is still above the April swing low at 2852, which means the uptrend that began in February is still alive, for now.
Cocoa is prone is very deep retracements. Following a strong move in one direction, it is typical to see a 75%, or greater, pullback of that move. 90% pullbacks aren't that rare either, and there are a number of examples over the last few years where the price retraced slightly more than 100%, only to revert back in the trending direction.
That means Cocoa is in a trade zone right now. With the trend up (since February), the current decline has retraced 90% of the April rally. It could continue to drop slightly below the April swing low of 2852, but a long trade is close at hand.
Figure 1. July Cocoa Futures - Daily Chart
Ideally wait for the price to consolidate for a few days--two or more daily price bars moving predominantly sideways. This shows the selling has at least temporarily stalled. Consider buying when the price moves above the high of those sideways bars. A stop loss goes below the low of the consolidation.
There are two upside targets. The first is 3225. This is just below the May high and takes into account the possibility of a double-top chart pattern or a range developing. The second target is for if the uptrend continues, and the price rallies above the 3240 swing high. In that case, the next target is 3320.