Fundamental AnalysisGuar futures registered slight correction after touching its weekly high and settled with marginal losses despite of rising export demand in the physical market.
In the short term, increasing demand at lower levels amidst rising supplies with the fresh arrivals of early sown Guar crop may keep Guar prices in a narrow range of Rs. 1650-1780 per qtl.
With the second spell of rains coming in at the right time in the growing areas, the crop could be on target to meet the initial estimate of 1.10 crore bags output. However, it will take another week or so before we can make the exact estimate of the crop.
Guar prices since last 2 years has taken a very good support around 1600 levels in the month of Sept-Oct and bounced back from there. This year too, we expect the prices to take support around 1600 levels.
Technical AnalysisGuar prices (NCDEX November Contract) settled lower at Rs.1705 per quintal on Friday, against the previous day’s close of 1719.
RSI is at 48.66 is in the neutral zone. Prices closed above its 5 days SMA, 20 days SMA but below its 65 days SMA indicating a sideways trend.
Guar prices are likely to trade in sideways manner for the intraday. Strong support is seen at 1650 level.
Outlook Fresh arrivals at Ganganagar coupled with expected demand may keep the Guar prices sideways for the intraday. However, in the medium to long term trend would depend on the crop estimates for the year 2008 and demand from the overseas market. Also, we have to keep a close watch on INR movement as it will impact the exports from India. November contract is likely to trade in the range of Rs. 1600-1900 per qtl in the coming months.
Courtesy: Angel Commodities
