The turmeric futures contract traded on the National Commodity and Derivatives Exchange Ltd has been on a strong downtrend ever since it recorded a high of ₹7,122 a quintal on April 28.

The price has tumbled about 18 per cent from this high. Strong decline in demand from North India coupled with higher arrivals of medium and poor quality turmeric have pulled the price sharply lower.

The contract’s downtrend remains intact. This offers traders with short-term perspective to make use of rallies to initiate fresh short position in this contract.

Medium-term view: The medium-term trend is down for the NCDEX-turmeric futures contract. The 200-week moving average at ₹6,760 has been continuously resisting the contract since this February.

As long as the contract trades below this resistance, the outlook will remain bearish. Intermediate-term support is at ₹5,500.

A break of this level can drag the contract lower to ₹5,000 in the medium-term.

Short-term view: The short-term view is also bearish. The NCDEX-turmeric futures contract has decisively breached the 200-day moving average at ₹6,017. The key short-term resistances are at ₹6,017, ₹6,070 and then ₹6,100.

The contract has been taking support near ₹5,740 over the last two days. While the contract remains above ₹5,740, a corrective up move to the above-mentioned resistances can not be ruled out. Such a rise can be a good opportunity for initiating fresh short positions.

Traders with a short-term horizon can sell the contract at ₹6,000 with a stop-loss at ₹6,200. The target is ₹5,700.

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