Fundamental Analysis

Chana prices at the domestic mandis are quoting at lower rates in anticipation of fresh arrivals from Rajasthan. Buyers may thus follow a wait and watch strategy.

If, significant demand from the domestic market is there Chana prices may find support.

According to second advance estimates, another bumper crop of Chana is expected in the coming season due to increased acreage and favorable weather in key growing areas. This may cap the prices and selling is likely to be witnessed if prices touch resistance level at the futures.

Area under other Rabi pulses like Urad and moong is expected to be better according to the report on March 04, 2010. This may cap the upside in Chana prices.

Technical Analysis

Prices on daily charts closed above its 10-days but below its 20-days EMA, indicating sideways trend.

14-days RSI is at 45.6 and is trading in sideways to up manner.

Outlook
Chana futures are likely to trade in the sideways manner with no clear fundamentals to drive the prices. The output of other Pulses is estimated to remain unchanged and thus prices of these Pulses like Tur, Urad and Moong which had declined in the last few weeks will not fall much now onwards. Thus, tracking the other Pulses, we don’t expect much downside in the Chana prices till mid March. In the long term (April onwards),Chana prices are likely to trade with bearish sentiments once prices consistently trade below Rs.2000 levels as fresh arrivals from Rajasthan and MP coupled with estimates of higher production may pressurize the prices.

Courtesy: Angel Commodities

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