The uptrend in Guar Seed has been gaining momentum over the last few days. The Guar Seed price has been moving higher since early October but this upmove halted in the last week of the month. After a brief pull-back, the price has started moving higher again.

The Guar Seed futures contract on the National Commodity and Derivatives Exchange (NCDEX) has risen about 6 per cent from around ₹4,495 per quintal. It is currently trading at ₹4,756 per quintal.

Outlook

The short-term view is bullish for the NCDEX-Guar Seed futures contract with immediate support at ₹4,700. The next key support is in the ₹4,550-₹4,500 region. Intermediate dips to these supports are likely to get fresh buyers.

As long as the contract trades above these supports an upmove to ₹5,100 is likely in the short term.

The level of ₹5,100 is a crucial medium-term trend resistance. Whether the contract breaks above this hurdle or not will decide the direction of the next move. A strong break above ₹5,100 will take the contract higher to ₹5,300 or even ₹5,500 over the medium term.

On the other hand, if the NCDEX-Guar Seed futures contract reverses lower from ₹5,100, a corrective fall to ₹4,750 and ₹4,700 can be seen on the back of profit booking.

Short-term traders with a big risk appetite can go long at current levels. A stop-loss can be placed at ₹4,625 for the target of ₹5,025. Revise the stop-loss higher to ₹4,790 as soon as the contract moves up to ₹4,820.

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

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