Coriander futures traded on the National Commodity and Derivatives Exchange Ltd (NCDEX) tanked 18 per cent in the last two months. The contract recorded a high of ₹13,345 a quintal in November 2014 and has dropped to ₹10,851 now. Oversupply and weak demand in the spot market has triggered this fall. The outlook is bearish and the coriander futures on NCDEX can extend their fall in the coming weeks. Traders with a short-term perspective can consider taking short position in this contract.

Short-term view: The short-term trend is down. The contract dropped below its 200-day moving average, at ₹11,109 last week. This level is now expected to act as a good resistance for the contract and keep it under pressure. Short-term support is at ₹10,600. But this level looks vulnerable as long as the contract trades below the 200-day moving average. A break below ₹10,600 can drag the contract lower to ₹10,160 – the 38.2 per cent Fibonacci retracement support level.

Traders with a short-term perspective can go short at current levels. Stop-loss can be placed at ₹11,300 for the target of ₹10,300.

The short-term outlook will turn bullish only if the contract records a strong break and close above the 200-day moving average level of ₹11,109. Such a break can take the futures higher to ₹11,650 thereafter.

Medium-term view: The medium-term outlook is also bearish. The contract faced strong resistance at ₹13,300 and has reversed sharply lower after recording a high of ₹13,345 in November last year. Key resistances are at ₹11,900 – the 21-week moving average levels and at ₹12,200. As long the contract trades below ₹12,200 the medium-term outlook will remain bearish. It can fall to ₹9,700 over this time period. This level is a strong support level for the contract which can halt the downtrend. A reversal from here will have the potential to take the contract higher to ₹12,000 levels once again.

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

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