Turmeric futures contract traded on the National Commodity and Derivatives Exchange (NCDEX) gained 4 per cent last week, forming a bullish engulfing pattern in the weekly chart.

On arrival of good quality turmeric from the producing regions, the turmeric contract extended its up move on Monday by adding 1.3 per cent to close at ₹8,646 a quintal.

Moreover, the contact continued to move northward on Tuesday as well surging more than 3 per cent to trade around ₹8,930.

After a strong fall in mid-January, the contract found support at ₹7,950 in last January and reversed direction triggered by positive divergence in the daily relative strength index.

This uptrend is strengthening as the contract breaches an immediate resistance at ₹8,600. This provides goof opportunity for traders with short and medium-term perspective to go long in the contract.

Medium-term view: The contract has been in a medium-term uptrend since taking support at ₹6,612 in July 2015. An emphatic breakthrough of resistance at ₹9,100 can pave way for an up move to ₹9,600.

Next key resistance is in the band between ₹10,000 and ₹10,200.

Traders with a medium-term view can buy with a stop-loss at ₹8,300 levels.

A conclusive fall below the significant support zone between ₹7,950 and ₹8,000 will mar the medium-term uptrend and pull the stock down to ₹7,500.

Short-term view: The short-term outlook is bullish. Taking support around ₹7,950 in late January, the contract has been in a short-term uptrend.

The indicators in the daily chart are heading upwards backing the up move.

Traders can buy with a stop-loss at ₹8,600. Targets are ₹9,100 and ₹9,400. Immediate supports are at ₹8,500 and ₹8,250.

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

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