The cardamom futures continued the uptrend on good buying interest during the week ended on Jan. 28th.
From starting of the week futures traded higher on fresh buying at lower levels. Auction activity started in Kerala which also added to the upside. However, later on prices took decent corrections amid huge arrivals at spot auction.
Nonetheless, overall good demand from exporters and on cues from spot activity futures traded up and ended on positive note.
Outlook
Cardamom futures are projected to continue the positive trend in coming week. Good demand at domestic and export front is likely to support the uptrend.
According to trade sources, one more round of picking is remaining for current harvesting season and likely fall in arrivals is expected in coming days.
However, profit booking at higher level can be seen during the week which might create further buying at lower levels.
Factors to watch out
Arrivals Daily auction activity in remained in the range of 31-124 tonnes while prices hovered in the range of Rs. 484-547 per Kg.
According to data released by Spices board, cardamom exports during Apr-Nov, 2011 were up by 444% to 3,100 tons against same period in last year
Total arrivals at spot auction till January 22nd were reported around 10,410 tonnes 6,910 tonnes arrived during same period last year
As per Spices Board data, international price of Cardamom in Saudi Arabia market improved a bit to $15.74 per kg during the week ended January 20th 2011; however, it was lower than $32.66 per kg quoted in the same period last year
Derivative Analysis
The MCX cardamom February contract prices, volumes and open interest have increased. It is a good indication that Market is attracting larger numbers of traders willing to open positions from the long side and hold them. Traders are more confident that prices will continue to climb in favor of a working long.
Technical
NCDEX cardamom prices February contract is trading higher with from the previous week, has made a high of 674 against the low of 630.1 and prices are trading lower at 666 levels which is marginally higher than the previous week.
Overall trend for cardamom prices are positive. While applying Fibonacci retracement tools on a daily chart, cardamom prices may test the levels of 708 and 735 levels which are 38.2% and 50.00% of the range of 819-598.
Technical momentum Indicator RSI-14 days is trade at 61.34 and it shows that cardamom prices may go upward direction for near term. Going by the above analysis we suggest buy at lower levels for the coming week.
Courtesy: Karvy Commtrade Ltd.
