The continuous futures contract of guar seed on the National Commodity and Derivatives Exchange (NCDEX) rallied above a falling trendline resistance on Monday. This move confirms an ascending triangle pattern, indicating a rally from here.

However, on a closer look, the contract, which is now trading around ₹6,050, seems to face a considerable barrier at ₹6,100. Until this resistance holds, we cannot assume that the bulls are on back in action.

If the contract rises past the resistance at ₹6,100, the next stop is likely to be at ₹6,400. But a breakout of ₹6,100 is expected to carry enough momentum that will lift the contract over ₹6,400, potentially to ₹6,685.

On the other hand, if the contract falls from here, it has a solid base formed in ₹5,680-5,750 price region. A break below this level is less likely. If it occurs, it will change the outlook to negative where the price can fall to ₹5,300–a support.

Trade strategy

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Balaji W S 463@Chennai

Nifty Prediction – January 9, 2023 – Consider intraday longs

We suggest traders to stay out for now and initiate fresh long positions on a decisive break above the ₹6,100-levels. Keep stop-loss at ₹5,900 at first and modify it to ₹6,250 when the contract touches ₹6,400.

Tighten it further to ₹6,400 when the contract crosses ₹6,500. Exit the longs at ₹6,650.

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