Comments
Castorseed prices have been gaining since June 2020. Although there were intermittent price actions, the overall trend remains bullish. As a result, the continuous futures contract of castorseed on the National Commodity and Derivatives Exchange (NCDEX), by taking support at ₹3,535 in June last year, embarked on a fresh rally.
However, a couple of months ago, the contract lost momentum. Even though it did not reverse the trend, it moved to a consolidation phase. In mid-October this year, the contract regained momentum and rallied past the important level of ₹6,325. Notably, the consolidation phase resembles an ascending triangle pattern and the rally over the past couple of weeks has confirmed the breakout of the same. Thus, the likelihood of bullish continuation is high. This is also supported by the bullish RSI and MACD on the daily chart.
Going ahead, the contract may see a minor correction to ₹6,325, before moving up. Hence, traders can go long at the current level of ₹6,570, and can buy again when the price drops to ₹6,325. Place stop-loss at ₹6,200. On the upside, the contract has the potential to reach ₹6,950. But there can be a pause at ₹6,800.
So, one can book 50 per cent of the longs when the price reaches ₹6,800. Thereafter, revise the stop-loss to ₹6,650 and look for the next target at ₹6,950. In case the price rallies above ₹6,800 without correcting to ₹6,325, one can maintain stop-loss at ₹6,650.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.