NCDEX Chana Future prices has been trading mixed during the month of June, closing at Rs.4182/quintal by 2nd July. It is similar compared to Rs.4188/quintal reported on 1st June. Lower supplies and lower demand in the domestic markets in the lockdown situation brought sideways trend in NCDEX Chana futures. However, NCDEX Chana prices started to witness downtrend from the higher side due to increased farm activities and easing lockdown situation nationwiden the rural regions.
Fundamentally for the month ahead, NCDEX Chana futures is estimated to remain mixed due to full fledged resuming of farm activities in the rural and semi urban regions of India. In the current lockdown scenario, the demand continues to remain subdued as market traders have shifted their focus to the kharif commodities due to monsoon season. But then, NAFED continues to buy Chana from MSP levels of Rs.4875/quintal from the major states of Madya Pradesh, Rajasthan and Uttar Pradesh. Conversely, arrivals in the local mandi and has been reportedly lower in the rural and semi urban regions; which is also expected to cap major upside movement in the spot and future prices in the coming weeks. The months of June and July is considered to be the off season for rabi crops and since there is no major exports or festive buying of Chana Dal and Basan, the prices of NCDEX Chana Futures will remain bearish in the month ahead. Monsoon plays a critical role as well in determining the movement of the agricultural commodities. Itall depends on how the rainfall is witnessed during this year which would be the key to determine the sowing of the rabi crops during the later winter season. Higher sowing and higher yields of the kharif pulses with good monsoon is expected to increase the yields for the rabi crop sowing in the winter season from October month onwards. In conclusion, we expect sideways trend in NCDEX Chana Futures for the month ahead.
On the daily timeframe, NCDEX Chana (Aug) has faced resistance near its “Horizontal Line” which confirms bearish presence in the counter. Moreover, price has breached below its 200 days “Simple Moving Average” which indicates weakness. Furthermore, Super Trend (7,1) has shown a sell signal which confirms bearish control. Also, momentum indicator Stochastic (6) is in a negative crossover, which confirms bearishness in the counter. So, based on the above technical structure one can initiate a short position in NCDEX Chana (Aug) future at CMP 4208 or a rise in the prices till 4280 levels can be used as a selling opportunity for the target of 3800. However, the bearish view will be negated if NCDEX Chana (Aug) closes above the resistance of 4400.
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