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The price of cottonseed oilcake (COCUDAKL) has been on a rise since the final week of September.
The continuous contract of COCUDAKL on the National Commodity and Derivatives Exchange (NCDEX), which took support at ₹2,270 in September has rallied to the current level of ₹3,100.
The uptrend looks strong and as it stands, the chart shows that the contract is likely to continue trending upward. From the current level, the nearest resistance is at ₹3,365, and the subsequent one is at ₹3,575.
Nevertheless, before crossing over ₹3,200, there is a chance for the prices to drop to ₹2,940 and then rebound.
On the other hand, if the contract drops below ₹2,940, the short-term outlook might turn bearish. In such a case, the prices could decline to ₹2,750 at first. The fall might even extend to ₹2,500. That said, there are no signs of weakness in the uptrend and so one can consider going long.
Trade strategy
Go long on NCDEX-cottonseed oilcake futures at the current level of ₹3,100 and add more longs if the price dips to ₹2,940. When the contract touches ₹3,365, exit one-third of the longs and tighten the stop-loss to ₹3,200. Exit the remaining longs at ₹3,575.
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