Jeera prices have begun this week on a strong note. Jeera futures contract traded on the National Commodity & Derivatives Exchange (NCDEX) has surged about 4 per cent so far this week. The contract is currently trading at ₹18,355 per quintal. Expectation for an increase in both the domestic and export market coupled with a shortage in supplies have triggered this rally in Jeera prices. The strong rally in the first two days of this week signals the end of the down move that was in place since May.

Outlook The short-term view is bullish for the NCDEX-Jeera futures contract. The strong downtrend that was in place from the high of ₹19,700 halted at a low of ₹17,290 last week. The price action on the daily chart suggests that fresh buying interest has emerged in the contract below ₹17,500. It also signals that any intermediate dips in the coming days may attract further buyers into the contract at lower levels.

The sharp move this week has taken the contract well above a key near-term resistance level of ₹17,800. This level may now act as a good support in the near term. A rise to ₹19,300 is likely in the short term. Further break above₹19,300 will increase the likelihood of the contract extending its rally to ₹19,850 thereafter.

The near-term view will turn negative if the contract breaks below the resistance-turned-support level of ₹17,800. Such a break will take the contract lower to ₹17,500 initially. Further break below ₹17,500 can drag the contract down to₹17,000. This level of ₹17,000 is a significant short-term support. The contract will come under renewed pressure only if it falls below ₹17,000. In such a scenario, the possibility of the contract tumbling to ₹16,400 or even ₹16,000 levels will increase. But such a sharp fall looks unlikely at the moment.

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

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