Chana futures remained on gaining note in the week gone buy as the arrivals in South India were reported to be lower than last year.
Spot prices gained from `3150/quintal to `3250/quintal and the arrivals declined to 15 motors towards closing of the week which supported gain in spot prices as well as futures. Imports of pulses during current year might be lower on less availability of exportable surplus in Canada and Australia which cushioned price rise.
Trader sources estimate production to be 55-60 lakh tons, 10 lakh tons lower than last year which lent support to prices.
Outlook:
Chana prices are forecast to resume weaker note in the week ahead owing to the gaining momentum of the arrivals. Across south Indian markets arrivals are estimated to increase with the congenial weather conditions for harvesting. Demand from bulk buyers is very sluggish across spot markets which might keep prices under pressure next week.
Weather in Rajasthan regions is supporting good crop growth which might erase crop concerns exerting pressure on prices. However, the near term trend is positive and buying at lower levels is recommended for investors.
As per second advance estimates, pulses production is likely to drop by 1 million tons which is majorly contributed by chana. Production estimates for 2011-12 crop is 10 lakh tons lower compared to last year. This occurred due to lower acreage and shift of acreage under Kabuli chana in Madhya Pradesh and Andhra Pradesh regions.
Technical Analysis:
Last week NCDEX chana prices traded higher and made a high of 3313 against the low of 3071 and currently are trading at 3280 levels. Last week we have seen short covering in chana prices. While applying Fibonacci retracement levels chana prices have major resistance is seen at 3405 levels which is 50.00% of the retracement of the range of 3742-3069 levels.
While major support is seen at 3220 levels if breaks this levels next support is seen at 3150 levels. The momentum indicator RSI 14 days is currently trading at 53.71 which is near 50(centre line) it shows mixed trend may be seen in the market.
Going by the above analysis for the coming week chana prices may trade in the range of 3150-3405 levels.
Courtesy: Karvy Commtrade Ltd.
