Fundamental Analysis In the last week, Guar prices had shown some signs of recovery in the physical markets due to improved demand at lower levels. Futures also recovered by almost Rs. 100 per qtl in the previous week.
On Tuesday, prices tested a high of Rs. 1602 per qtl. However, settled lower towards the end due to profit booking.
The demand for Guar gum which is normally at its peak during the month of December every year did not picked up in the current crop season due to economic slowdown.
However, now, when the Guar seed and gum prices have dipped to its 3 years low, the exporters and millers have started stocking Guar seed and Guar gum on expectations that the prices could recover once the overseas demand pick up.
Technical Analysis Guar prices (NCDEX March 09 Contract) settled at Rs. 1571 per qtl against the previous day’s close of Rs. 1574 per qtl.
RSI is at 60.69 is moving towards overbought region. Prices closed below its 65 days SMA but above its 5 days, 20 days and indicating a sideways to up trend.
Trend in March Guar futures remain sideways to up. However, candlestick pattern has shown reversal pattern on the daily charts. Thus prices might trade initially lower. Buying at lower levels is suggested for the intraday:
Outlook Improved demand for Guar gum at lower price levels may keep Guar futures firm in the coming days. However, in the medium to long term, trend in Guar complex would depend on overseas demand for Guar gum which is currently at a very slow pace due to overall economic slowdown. Also, we have to keep a close watch on INR movement as it will impact the exports from India.
Courtesy: Angel Commodities
