The price of cottonseed oilcake (COCUDAKL) has been on a rise since the final week of September.
The continuous contract of COCUDAKL on the National Commodity and Derivatives Exchange (NCDEX), which took support at ₹2,270 in September has rallied to the current level of ₹3,100.
The uptrend looks strong and as it stands, the chart shows that the contract is likely to continue trending upward. From the current level, the nearest resistance is at ₹3,365, and the subsequent one is at ₹3,575.
Nevertheless, before crossing over ₹3,200, there is a chance for the prices to drop to ₹2,940 and then rebound.
On the other hand, if the contract drops below ₹2,940, the short-term outlook might turn bearish. In such a case, the prices could decline to ₹2,750 at first. The fall might even extend to ₹2,500. That said, there are no signs of weakness in the uptrend and so one can consider going long.
Trade strategy
Go long on NCDEX-cottonseed oilcake futures at the current level of ₹3,100 and add more longs if the price dips to ₹2,940. When the contract touches ₹3,365, exit one-third of the longs and tighten the stop-loss to ₹3,200. Exit the remaining longs at ₹3,575.
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.