Cottonseed oilcake (COCUDAKL) futures have been oscillating in the broad range of ₹2,280-2,830 since May last year. While the contract moved above ₹2,830 in early 2023, that was short-lived as the contract soon fell below ₹2,830. Otherwise, the resistance at ₹2,830 has been holding well.

That said, in early August this year, the contract bounced off the support at ₹2,280 and established a rally. The price increased over the past month and the contract is now hovering around ₹2,830.

Since this is a strong barrier, the contract is likely to fall off this level. While the nearest support is at ₹2,450, the downswing might extend to ₹2,280. 

On the other hand, if cottonseed oilcake futures break out of ₹2,830, it can see a quick rally to ₹3,150. A breach of this can push the contract to ₹3,400.

Trade strategy

Given that the contract is now trading near a resistance, traders can consider fresh short positions. Sell cottonseed oilcake futures now at around ₹2,830 with initial stop-loss at ₹3,000.

When the contract falls to ₹2,550, tighten the stop-loss to ₹2,680, and book profits at ₹2,450 since a corrective rally may be likely after this.