The cardamom futures contract traded on the Multi Commodity Exchange has been in a strong uptrend since December 2013. The contract has surged about 69 per cent from its low of ₹571 a kg recorded in December 2013 to ₹964 now. The rally is currently pausing and the contract is consolidating in a sideways range within its overall uptrend. For those who had missed the previous rally, the current consolidation is a good opportunity to join the ride.

Short-term view

In the short-term, the MCX-cardamom futures contract has been trading sideways between ₹910 and ₹1,030 since the last week of July. A breakout on either side of this range will decide the short-term trend for the contract. A bullish break above ₹1,030 is quite likely in the coming days As the current consolidation is happening above the 200-week moving average, currently at ₹912.6. Also, given the fact that the preceding trend is up, a downside break of the ₹910-₹1,030 sideways range looks less probable. Having said this, a strong break above ₹1,030 can take the contract higher to test its previous high of ₹1,130 recorded in May.

Traders with a short-term perspective can buy the contract on declines near ₹920 with a stop-loss at ₹890 for the target of ₹1,000.

The outlook will turn negative if the contract records a strong close below the 200-week moving average level. The ensuing short-term target in such a scenario will be ₹830.

Medium-term view

The medium-term outlook is bullish for the MCX-cardamom futures contract. Key support is at ₹800. As long as the contract trades above this level, there is no danger of a fall. Resistance is at ₹1,130. A strong breach of this level can take the contract higher to the next target of ₹1,300. Traders with a medium-term perspective can go long now. Stop-loss can be kept at ₹770 for the target of ₹1,280. Intermediate declines in the contract to the short-term support at ₹910 and then to ₹800, if seen, can be considered for accumulating more long positions.

The medium-term outlook will turn bearish only if the contract decisively breaks below ₹800. The next target will then be ₹600.

(Note: The recommendations are based on technical analysis. There is a risk of loss in trading.)