Fundamental Analysis

Stockists buying may be initiated as the prices are quoting at lower levels.

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

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 50.9 and is trading in sideways manner.

MACD is trading in the positive territory.

Outlook

Chana futures are likely to trade in the sideways to up manner due to improved buying at lower levels. 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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