Comments
Turmeric prices have been gaining momentum the last couple of weeks. The turmeric futures contract traded on the National Commodity and Derivatives Exchange (NCDEX) has surged over 11 per cent in the last two weeks from ₹6,914 a quintal on November 17 to the current level of ₹7,696.
Strong demand from the domestic as well as the export market has pushed turmeric prices higher. Quality arrivals in the spot market have also aided the price rise in recent times.
The recent rally has happened from a key support level of ₹6,800, which leaves the outlook bullish for the contract.
Short-term outlookA key resistance lies ahead for the turmeric futures contract in the ₹7,900-50 region. This resistance zone is likely to be tested in the near-term.
Inability to break above this hurdle can trigger a corrective fall to ₹7,400 or ₹7,300 in the short-term.
The 100-day moving average, which is on the verge of crossing over the 55-day moving average, indicates that the downside could be limited in the short-term. This suggests that further fall below ₹7,300 is less probable at the moment. An eventual break above ₹7,950 can boost the momentum.
Such a break can take the contract higher to ₹8,500 or ₹8,600 thereafter.
Short-term traders can go long on dips at ₹7,500. Stop-loss can be placed at ₹7,100 for the target of ₹8,300. Revise the stop-loss higher to ₹7,750 as soon as the contract moves up to ₹7,950.
Long-term outlookThe contract has been in a strong downtrend since December 2015 from its high of ₹10,660. This downtrend halted at a low of ₹5,234 in May this year.
The contract has recovered strongly since then. This upmove signals an end to the downtrend that has been in place since December 2015.
Also, the price action since August 2016 reflects the formation of an inverted head-and-shoulder pattern on the charts. A strong break and a decisive weekly close above ₹7,950 will confirm this pattern.
Such a break can pave the way for the pattern target level of ₹10,500 over the long-term.
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.