The year 2018 has not been a good year for turmeric. The price of this spice-commodity has been under pressure and falling continuously since the beginning of January.

The turmeric futures contract on the National Commodity and Derivatives Exchange (NCDEX) has tumbled over 15 per cent so far this year. It is currently trading at ₹6,636 per quintal. An increase in arrivals from the major producing regions coupled with weak demand had kept the commodity prices under pressure.

Outlook pales

The outlook for the contract is negative. The strong fall since last week has dragged the contract decisively below key medium-term support level of ₹6,770. Next resistance is poised at ₹6,880. These resistances can cap the contract’s upside in the short-term. Intermediate bounces to these levels may attract fresh sellers coming into the market. A fall to ₹6,500 is likely in the short-term. However, an upward reversal from this support can trigger a relief rally towards ₹6,800 and ₹6,900 again. In such a scenario, the contract can remain range-bound between ₹6,500 and ₹6,900 for some time.

A strong break and a decisive weekly close below ₹6,500 will increase the downside pressure. Such a break will see the contract tumbling towards ₹6,000 or even to ₹5,800 over the medium-term.

The region between ₹7,000 and ₹7,100 is a strong resistance for the contract. The outlook will turn bullish only if the contract breaks above ₹7,100 which looks unlikely at the moment.

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

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