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Supports to cap downside in NCDEX Coriander

Supports to cap downside in NCDEX Coriander

August 7, 2018

 

Coriander prices have been recovering over the last couple of months. The Coriander futures contract on the National Commodity & Derivatives Exchange (NCDEX) saw a low of 4,186 per quintal and has reversed sharply higher.

 

The contract has surged over 25 per cent from the low and touched a high of 5,240 last week. It has come-off from the highs and is currently trading at 4,946 per quintal.

 

Outlook

 

Though the contract has come off from the high of 5,240, but the overall uptrend that had begun from June remains intact. A strong support is in the 4,850-4,800 region. Though the current downmove can extend to test this support zone, a break below 4,800 looks less probable. Also there is an inverted head and shoulders reversal pattern visible on the chart. This is a bullish reversal pattern. The neck-line support of this pattern is also at around 4,800 which makes this level a very strong support.

 

An upward reversal from 4,800 can take the contract higher to 5,300 over the short term. A further break above 5,300 will boost the momentum. Such a break will increase the likelihood of the contract targeting 5,500 and 5,700 over the medium term.

 

The bullish outlook will get negated only if the contract declines below 4,800. Such a break can drag the contract lower to 4,600 or even lower.

 

Traders with a medium-term perspective can go long at current levels and also accumulate on dips at 4,875 and 4,825. A stop-loss can be placed at 4,700 for the target of 5,450. Revise the stop-loss higher to 5,150 as soon as the contract moves up to 5,225.

 

Source:https://www.thehindubusinessline.com

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