Comments
Mustard seed prices have gained momentum over the last one week. The Rapeseed–Mustard seed (RMSEED) futures contract on the National Commodity and Derivatives Exchange (NCDEX) has surged over 6 per cent since October 13.
Prior to this rally, the contract was on a corrective fall from ₹3,874 per quintal in August. This fall halted at a low of ₹3,662 in the first week of this month. After a brief sideways consolidation for about two weeks, the contract has reversed higher again. It is currently trading at ₹3,929/quintal.
This rebound indicates that the uptrend that had began in June has been intact and a fresh upward move has just begun.
OutlookThe outlook for the NCDEX-Mustard seed futures contract is bullish. An inverted head and shoulders reversal pattern is visible on the chart. This is a bullish reversal pattern.
The strong break above ₹3,800 in the past week confirms this pattern. The region between ₹3,800 and ₹3,820 will now serve as a good support in the short-term. Dips to this support may find fresh buying interest in the contract.
Resistance is at around ₹3,950 which is holding well as of now. This hurdle was tested on Monday and the contract continues to hover below this level. Inability to break above this resistance in the coming days may witness a pull-back move to ₹3,850 or ₹3,800 in the short term. A further fall below ₹3,800 is less probable.
An upward reversal thereafter can take the contract higher to ₹3,950 again. An eventual break above ₹3,950 can take the contract higher to ₹4,000 initially.
A further break above ₹4,000 will pave way for the next target of ₹4,160. Such a rally breaking above the psychological level of ₹4,000 will increase the possibility of the contract targeting ₹4,300 or even higher levels from a medium-term perspective.
Traders can make use of dips to go long at ₹3,850 and accumulate at ₹3,800. Keep the stop-loss at ₹3,730 for the target of ₹4,000.
Revise the stop-loss higher to ₹3,880 as soon as the contract moves up to ₹3,925.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.