The futures price of Chana on the National Commodity and Derivatives Exchange (NCDEX), after registering a high of ₹5,607 in early October last year, reversed the direction and started moving southwards. The decline was strong and as a result, the price dropped below the crucial support of ₹5,000 in December and extended the downswing.
This resulted in the March futures contract hitting a low of ₹4,353 by the end of last year.
But by then, the bears had lost momentum and what followed was a sideways trend wherein the contract was oscillating between ₹4,400 and ₹4,570. This trend continued until yesterday and the futures witnessed good buying interest and broke out of the range on Thursday with good volume.
Thus, the contract seems to have made a genuine attempt towards a bullish trend reversal.
On the upside, the nearest resistance is at ₹4,730. A breach of this level can lift the price to the subsequent resistance at ₹4,800.
Traders can buy the contract with stop-loss at ₹4,550.