Traders can go long at the current price of ₹6,570 and buy again when the price falls to ₹6,325
Since June 2020, castor seed prices have been rising. Despite sporadic price movements, the overall trend stays bullish. As a result, the castor seed continuous futures contract on the National Commodity and Derivatives Exchange (NCDEX), which found support at ₹3,535 in June last year, began a new rally.
However, the contract lost steam a few months ago. Even though it did not revert the trend, it did enter a period of consolidation. The contract regained momentum in mid-October of this year, rallying past the critical level of ₹6,325.
Remarkably, the consolidation phase represents an ascending triangle pattern, and the recent rally has confirmed the pattern’s breakout. As a result, the chances of a bullish continuation are high. The bullish RSI (relative strength index) and MACD (Moving average convergence divergence) on the daily chart also support this.
Going forward, the contract may see a slight correction to ₹6,325 before continuing to rise. As a result, traders can go long at the current price of ₹6,570 and buy again when the price falls to ₹6,325.
Set your stop-loss at ₹6,200. On the plus side, the contract could reach ₹6,950. However, there may be a pause at ₹6,800.
As a result, when the price reaches ₹6,800, one can book 50% of the longs. After that, lower the stop-loss to ₹6,650 and look for the next target at 6,950. If the price rises above ₹6,800 without correcting to ₹6,325, the stop-loss can be set at ₹6,650.