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The continuous futures contract of mustard seed (RM seed) on the National Commodity and Derivatives Exchange (NCDEX) has been moving in a broad range during the initial months of this year. That is, until mid-April, the contract was largely oscillating between ₹5,350 and ₹6,400.
Even though the contract is moving in the narrow range of ₹8,460 and ₹8,760 since past three week, the overall uptrend stays valid. The contract is now hovering near the lower boundary of the range where the 21-day moving average coincides. Besides, a rising trendline lies in this region providing additional support, making it an important base.
Going ahead, the major trend being bullish and that the contract is trading near a key support level, the likelihood of a bounce looks higher. On the upside, the contract is likely to move beyond ₹8,760 in the near-term and touch ₹9,000. This is a psychological level and a minor price correction can be expected,.
Traders can go long on mustard seed futures at current levels. While the initial stop-loss can be at ₹8,200, revise it up to ₹8,800 if the contract rises past ₹9,000 and look to exit at ₹9,250.
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