Comments
Turmeric futures contract traded on the National Commodity and Derivatives Exchange (NCDEX) has surged 5 per cent last week to ₹8,506 a quintal, forming a bullish engulfing candlestick pattern in the week chart. This bullish momentum continued on Tuesday as the contract price rose more than 1 per cent to record an intra-day high at ₹8,648 levels as participants built-up long positions, backed by pick up in the demand at the spot market. But, the contract has subsequently started to witness marginal selling pressure and experiencing a volatile movement. It currently trades at ₹8,530 per quintal. This gives good opportunity for traders with short and medium-term perspective to go long in the contract. The contract has a significant long-term support in the band between ₹7,950 and ₹8,100. This support band arrested the contract’s decline in January, April and May this year. After taking support in this band in the previous week, the contract is on a near-term rally.
Medium-term view: Since taking support at ₹6,612 in July 2015, the contract has been on an intermediate-term uptrend. A conclusive break-out of a key medium-term resistance at ₹9,100 can reinforce the bullish momentum and take the contract higher to ₹9,600 in the medium term. Subsequent resistance for the contract is in the band ₹10,000 and ₹10,200. Traders with a medium-term perspective can buy in dips with a stop-loss at ₹8,150 levels. On the other hand, an emphatic decline below the significant long-term support in the band between ₹7,950 and ₹8,100 can mitigate the uptrend and drag the contract down to ₹7,500 in the medium term.
Short-term view: The short-term outlook is bullish for the contract. It took support at around ₹8000 last week and reversed higher forming a bullish engulfing pattern in the weekly chart which is a reversal pattern. The contract has also moved above the 200-day moving average recently, is also a positive sign. Traders can buy with a stop-loss at ₹8,300. The short term targets are ₹8,800, ₹9,100 and ₹9,400. Support at ₹8,300 and ₹8,100 can provide base.
Note: The recommendations are based on technical analysis. There is a risk of loss in trading.
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.