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, headed south. The bears had good control which resulted in the price slipping below the key support at ₹5,000 and ₹4,500. The sell-off stalled in late December and then the contract started to move sideways. That is, the March expiry contract was largely oscillating between ₹4,400 and ₹4,580.

But towards the end of January, the commodity started to gain traction and consequently, the futures began to rise. But then again, after moving past ₹4,580, the bulls could not build on to it and price ruled flat at ₹4,675. On Tuesday, the contract broke out of ₹4,675 and closed above ₹4,700 with good volume, turning the outlook positive. There are a few other technical factors supporting the bullish bias. The relative strength index and the moving average convergence divergence indicators on the daily chart have entered their respective bullish region and the average directional index is indicating good upward strength.

Traders can initiate fresh long positions with stop-loss at ₹4,600 in March contract on declines. The immediate resistance levels are at ₹4,830 and ₹4,950 which can be the potential targets.

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