Commodity Calls

Initiate fresh long in NCDEX mustard seed

Akhil Nallamuthu BL Research Bureau | Updated on July 29, 2021

Stop-loss: ₹7,450; Target: ₹7,990

 

The continuous futures contract of mustard seed (RM seed) on the National Commodity and Derivatives Exchange (NCDEX) has been charting a sideways trend since November last year. That is, it was largely trading within the broad range of ₹5,350 and ₹6,400.

 

But in early March, the contract set an uptrend from the range bottom which had enough momentum to lift the contract above the upper limit of the range i.e., ₹6,400. The upward movement continued and the contract reached ₹7,700 levels, where it lost traction. By mid-June, the contract retested the price level of ₹6,400. This time, it acted as a support against which another rally was established.

The futures began rallying again towards the end of June and on Monday, it rallied past the prior high of ₹7,710 and on Tuesday, it registered a fresh high of ₹7,790. However, it moderated from those levels and the contract is currently hovering around ₹7,650 levels.

The trend can be inclined towards upside as long as the price is above ₹7,500 and corroborating the positive outlook, the relative strength index (RSI) and the moving average convergence divergence (MACD) indicator on the daily chart is showing bullish signs. Also, the 21-day moving average (DMA) crossed over 50-DMA before a couple of weeks.

Given the prevailing conditions, one can be bullish and initiate fresh long positions with stop-loss at ₹7,450 and look for a target of ₹7,990.

Published on July 29, 2021

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