Comments
The price of castor seeds has been on the decline since mid-January. The futures contract on the National Commodity and Derivatives Exchange (NCDEX) fell off the resistance at ₹7,600. As bears continued to dominate, it slipped below a crucial support at ₹6,850 in the second week of February. This turned the outlook bearish and it is currently trading around ₹6,090.
The prevailing price action shows that the downward momentum remains strong. Although there is a chance the contract will see a corrective rally to ₹6,270 from the current level of ₹6,090, we expect it to resume the decline from ₹6,270, which is a resistance.
In two to three weeks, castor seed futures will most likely see their price drop to ₹5,780. This is a strong support and, therefore, a drop below this level is less likely.
Also read: India’s castor output seen 15% higher at 19.46 lakh tonnes for 2022-23
Trade strategy
One can initiate fresh short positions on castor seed futures at the current level of ₹6,090. Add more shorts if the price rises to ₹6,270. Place stop-loss at ₹6,420 at first. Modify the stop-loss to ₹6,020 when the contract falls below ₹5,900. Liquidate the shorts at ₹5,780.
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.