Turmeric prices have recovered strongly since June. The futures contract on the National Commodity and Derivatives Exchange (NCDEX) has reversed sharply higher from its June low of around ₹5,200 a quintal.

The contract has surged over 37 per cent from this low and is currently trading at around ₹7,178 per quintal. This sharp reversal and a strong surge marks the end of the prolonged downtrend that was in place since late December 2015.

A strong increase in domestic as well as export demand coupled with limited supplies and the slow pace of sowing this season aided the surge in turmeric prices.

After consolidating below the 200-day moving average resistance for over a week, the Turmeric futures contract breached this hurdle decisively on Friday by surging 3 per cent. The short-term outlook is bullish. The contract is well placed above its 200-day moving average.

Also, the 21-day moving average is on the verge of crossing over the 100-day moving average. This is a bullish signal suggesting that the downside could be limited in the near term.

Immediate support is at ₹6,850. A key short-term support is at ₹6,585, which is the 200-day moving average as well as a trendline support for the contract. A rise to ₹7,200 or ₹7,300 is likely in the near term.

Inability to break above ₹7,300 can trigger a corrective fall to ₹7,000 or ₹6,850.

Note: The recommendations are based on technical analysis and there is a risk of loss in trading

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