Cardamom prices have been on a strong surge since June. The cardamom futures contract on the Multi Commodity Exchange (MCX) made a low of ₹818.5 per kg in June and has reversed sharply from there.

The contract has surged a whopping 77 per cent and is currently trading at ₹1,450/kg. The uptrend gained momentum last month following the floods in Kerala. Supply concerns due to crop damage have sent the prices spiralling from around ₹1,100 in early August to ₹1,450 now.

Outlook: The uptrend that has been in place since June remains intact. Supports are at ₹1,300 and ₹1,250. A rally to ₹1,550 or ₹1,600 is likely in the short-term. The region between ₹1,550 and ₹1,600 is a crucial long-term resistance for the contract.

As such, the price action around this resistance zone will need a close watch. A strong break and a decisive weekly close above ₹1,600 will boost the momentum.

Such a break will then increase the likelihood of the current rally extending to ₹1,800 or even ₹1,900 over the medium term.

But if the contract reverses lower from the ₹1,550-1,600 resistance zone, it may leave the current uptrend under threat.

The contract has been broadly range-bound between ₹600 and ₹1,600 over the last several years. So, a pull-back from the ₹1,550-1,600 resistance region will keep the broader sideways move intact.

In such a scenario, the possibility of the prices tumbling towards ₹1,250 and ₹1,000 levels cannot be ruled out from a long-term perspective.

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

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