Agri-Tech: Weekly Picks

India Infoline News Service | Mumbai |

Chilly prices turned weaker as talks of improved supplies from Central India depressed the sentiment and pulled the prices to 4month lows of Rs4,800.

Agri-Tech: Weekly Picks

Market Recap
Indian spices market drifted mostly lower barring Jeera which extended its firm tone led by firm fundamentals of rising demand and a supportive technical picture. Jeera posted 3.5% gains for the week breaching the key level of Rs15,000, the highest since end August. Among the peers, pepper witnessed a see saw trading amid high volatility as prices failed to breach Rs44,000 and eventually tumbled lower for the week, Pepper prices have been caught in a higher range since the last couple of weeks as speculation ran high over crop quality and prospects. Chilly prices turned weaker as talks of improved supplies from Central India depressed the sentiment and pulled the prices to 4month lows of Rs4,800. Additionally, talks that old crop carry-in (stocks) could be higher also pressured the overall market mood for the week. Turmeric prices continued to make lower lows almost nearing the support level of Rs5,000. Factors such as improved new crop hopes and affluent carry-in also weighed on the sentiment. Notwithstanding the prior rise, prices found stiff resistance above Rs4,800 and lost over 1.7% on wow basis. Sugar prices maintained its range bound trade while witnessing marginal losses for the week.      

Recommended Strategy

CMP Trading range Strategy Levels Target Stop loss
Rs/Qntl





NCDEX Chilly Nov’12 4,866 4,750 – 5,000 -- -- -- --
NCDEX Jeera Nov12 15,305 14,900 – 15,700 -- -- -- --
NCDEX Pepper Nov’12 43,500 42,500 – 44,000 Sell Below 43,400 42,800 43,800
NCDEX Turmeric Nov’12 5,130 5,000 – 5,300 Sell Below 5,100 4,975 5,190
NCDEX Chana Nov’12 4,665 4,400 – 4,800 Sell Below 4,620 4,520 4,690
NCDEX Sugar Nov’12 3,292 3,220 – 3,350 Sell 3,300-3,310 3,240 3,345
Source: Bloomberg, India Infoline Research, rounded off to the nearest decimal

  • Prior observations suggest that chilli prices have recovered from the current levels of Rs4,800 and made it towards Rs5,000 and above. Can be considered as a risky buy pick.
  • Jeera prices have achieved the target for the earlier diamond pattern and could show some downside correction toward Rs15,000, which is a trendline support. Can be considered as buy pick at the supports.
  • Pepper prices continue to find stiff resistance above Rs43,750 and hence qualifies for a sell pick. Downside correction could take prices towards Rs43,000 in the near term. 
  • There is no sigh of relief in turmeric prices from persistent weakness, while the only supportive factor seems to be the psychological level of Rs5,000. Overall trend is range bound (with weak bias) until a signal emerges on either side.
  • Chana prices are approaching the intermediate trend line support of Rs4,600 and hence a bounce back could be expected. A breach of Rs4,730 is required to turn the sentiment positive.
  • Rs3,250-3,375 acts as a strong support for sugar prices and the recent price action indicating the inability to sustain above Rs3,300, mixed to weak tone could prevail in short run.
Chilly Nov’12
Chilly prices turned weaker breaking the key support zone of Rs5,000-,4950. Last week’s low of Rs4,802 acts as an initial support level, while major support rests at Rs4,750. Historical observations suggest that prices have recovered from the current levels and made it towards Rs5,000 and above. Closing above Rs4,900 would refurbish the positive momentum.

Pepper Nov’12
Pepper prices made futile attempt to breach the major barrier of Rs43,800-44,000. From the short term view point, prices seem to have taken support around Rs43,000 and as long as this level held, minor gains cannot be ruled out. Nevertheless, medium term trend looks vulnerable on the downside as long as Rs44,000 is not taken out.

Jeera Nov’12
Jeera prices extended its up trend albeit at a slower pace it breached the key resistance of Rss15,000 and  made a high of Rs15,700 for the week. This completes the target for the diamond pattern formed during September. Prices no face support at Rs15,000 which is also the intermediate trendline support level. Rs15,700 acts as a resistance level.

Turmeric Nov’12
Subsequent to a brief attempt to surpass Rs5,300, turmeric prices turned lower breaking a tad below Rs5,100 last week. As seen from the chart, prices are persistently weak, despite minor consolidation around every support level. Next support is identified at Rs5,000 which is also the psychological level. Rs5,350-5,450 stands as the resistance zone.   

Chana Nov’12
Chana prices posted initial gains amid lack of strong momentum to sustain the same. Price action since the last three months shows that, range above Rs4,850 has been a crucial resistance from where a sizeable downside correction has occurred. Currently, prices are holding the intermediate trend line support of Rs4,630 and minor bounce back could be witnessed. Only a close above Rs4,730 could lead to a positive turnaround.  

Sugar Nov’12
Sugar prices extended its range bound trade within Rs3,280-3,370 during most part of the week and is currently trading flat. Rs3,250-3,275 has been acting as a strong support zone for the prices and only break below the same could open doors for further weakness. However, it has not been able to sustain above Rs3,350 firmly which favors a mixed to weak trend for short run.  

Bhav Box
Markets Oct-20 Oct-13 Chg (%) High Low 30D-High 30D-Low
NCDEX Chilly Nov’12 4,818 5,006 (3.8) 5,068 4,802 5,408 4,802
NCDEX Jeera Nov12 15,465 14,940 3.5 15,700 14,470 15,700 13,585
NCDEX Pepper Nov’12 43,510 43,585 (0.2) 43,850 42,450 43,965 41,710
NCDEX Turmeric Nov’12 5,272 5,450 (3.3) 5,540 5,074 5,758 5,074
NCDEX Chana Nov’12 4,727 4,805 (1.6) 4,858 4,642 4,858 4,087
NCDEX Sugar Nov’12 3,307 3,359 (1.5) 3,380 3,285 3,591 3,285
Source: Bloomberg, India Infoline Research, rounded off to the nearest decimal, All units in Rs/Qntl

 

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