The crude palm oil (CPO) continuous futures contract on the Multi Commodity Exchange of India (MCX) took a temporary support at ₹1,125 recently. It has rebounded and gained 1.3 per cent at ₹1,144.5 per 10 kg on Thursday.
In June this year, the contract found support in the band between ₹965 and ₹975 and resumed its long-term uptrend. The uptrend has been in place after it recorded a low of ₹567 in May 2020 . Since June, the contract has been on a medium-term uptrend. But, it met with a key hurdle at ₹1,200 in the past week and began to decline.
With the uptrend, the contract has been moving sideways over the past two months in the band between ₹1,120 and ₹1,200. The daily as well as the weekly indicators are hovering in the neutral region. A conclusive breakout on either side of ₹1,120 and ₹1,200 range is needed to determine the short-term trend. A strong rally beyond the immediate resistance level of ₹1,160 can take the contract to ₹1,200 in the near term.
A decisive breakthrough of ₹1,200 can strengthen the medium-term uptrend and take the contract to ₹1,250 and then to ₹1,300 in the medium-term. But a fall below ₹1,120 can alter the medium-term uptrend and drag the contract to ₹1,050 initially and then to ₹1,000 over the medium-term. Traders can wait and take fresh long positions on a break above ₹1,160 levels with a fixed stop-loss.