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Jeera prices have rallied strongly in the last one month. Jeera futures on the National Commodity and Derivatives Exchange are up 18 per cent from the low of ₹10,505 a quintal recorded on October 10. Pick-up in export demand coupled with a strong domestic demand in the spot market in recent times has pushed its price higher. Low supply at the same time has also added pressure and supported the rally.
On the charts, NCDEX jeera futures appear strong. The outlook is bullish and the current rally can extend in the coming weeks. Traders can consider taking long position in this contract.
Short-term view: The short-term outlook is bullish. The contract has decisively breached its resistance at ₹12,000 on Monday. Immediate support is at ₹12,260. The 100-week moving average is also at ₹12,200. These levels could limit the downside in the short-term. While the contract trades above these supports, a rise to ₹13,000 looks likely in the coming days.
Traders with a short-term perspective can go long at current levels. Stop-loss can be fixed at ₹12,150 for a target of ₹12,900.
The short-term outlook will turn bearish if the contract declines below ₹12,200. The next target on such a fall will be ₹12,000.
Medium-term view: The medium-term outlook is also bullish for jeera futures. The contract had hovered around ₹12,000 level for three days before breaking above this hurdle.
This could add momentum to the rally and an immediate decline below ₹12,000 looks less likely. Having said this, the NCDEX jeera futures can rise to ₹13,350 – the 200-week moving average level over the medium-term.
Traders with a medium-term perspective can hold the long position with a wider stop-loss at ₹11,900 and for the target of ₹13,200. Intermediate declines to ₹12,000 if seen can be used to accumulate more long positions.
The level of ₹12,000 will now be a psychological support now. Key medium-term support is at ₹11,700. The outlook will turn negative if the contract declines below ₹11,700. Such a fall can take the contract lower to the next targets of ₹11,000 and ₹10,700.
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