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Chana

NCDEX Chana Future prices had traded bearish during the June month, closing at Rs.4864/quintal by 5th July. It is lower by 8.94% compared to Rs.5299/quintal reported on 31st May. Lower demand in the domestic market was weakened amid lockdown situationin various states. Moreover, weak demand for gram flour, Basan and chana daal was witnessed which added pressure in prices.

Fundamentally for the month ahead, NCDEX Chana futures is estimated to witness bearish trend as The Commerce Ministry of India has implemented a stock limit on pulses except Moong under the Essential Commodities Act (ECA), with immediate effect, which will be effective until 31 October, to rein in surging prices as wholesalers can only stock up 200 Metric Tonnes (MT) (provided there should not be more than 100 MT of one variety) of pulses, while retailers can only stock 5 MT. For millers it will be 3 months production or 25% of annual installed capacity, whichever is higher. For importers, the stock limit will be same as that of wholesaler for stocks held/imported prior to 15th May 2021. For stocks imported after 15th May 2021, stock limit applicable to wholesaler, will apply after 45 days from date of customs clearance. . Moreover, the major retail markets in India continues to remain closed as various state governments is taking precautions with slow reopening of the Indian markets amid worries of third wave of covid-19. Additionally, we are not likely to see any festive demand during the July for basan and Chana dal which is forecasted to cap any bullish movement in Chana prices. Supply side is likely to ease. Traders and stockists, who have more stock than stipulated limit, may release stock

On the daily chart, NCDEX Chana (Aug) future has been falling continuously with Lower Lows and Lower Highs formation from the last couple of days. In addition, the price is trading below the Ichimoku Cloud & 200 Exponential Moving Averages, which confirm a bearish trend in the near future. Moreover, the trend indicator Parabolic SAR also indicated a bearish trend. Furthermore, a momentum indicator RSI (14) reading is below 50 levels, which suggest also bearish move for the near term. However, On an hourly timeframe Stochastic RSI suggested positive crossover, which indicates slightly recovery in the counter. Hence, based on above technical structure, we are recommending sell on rise strategy in NCDEX Chana (Aug) future around 4980 or a rise in the price till 5030 levels can be used as selling opportunity for the downside target of 4450. However, the bearish view will be negated if NCDEX Chana (Aug) future close above the resistance level of 5250.

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