NCDEX JEERA July Contract – Technical Outlook & Trading Strategy

The price of Jeera was in corrective mode since the start of March, 2011 to mid June. Since then
the price has been trading in a broad price band of Rs 15400 to Rs 13300 levels.

But, as outlined in the chart above the key observation to be made is that the price action/pattern within this broad range is taking the shape of a bullish inverted head & shoulders pattern.

This is an extremely bullish price pattern and this will have a positive effect on the price of Jeera over the near term to short term.

The neckline resistance levels for the said pattern is placed at Rs 15240 levels.

We expect the price to rally towards the neckline resistance level of Rs 15240 levels in the near term.

Once the price gives a breakout above the neckline resistance levels the implied targets of the price pattern suggest that the price can rally to levels of Rs 16000 / Rs 16650 levels. The other positive technical factor is the buy signal given by the RSI indicator backed by the positive divergence.

We recommend traders to buy between Rs 14925—Rs 14700 levels with a stop loss placed below Rs 14297 levels for the first upside target of Rs 15240 levels.

Once the price registers a sustained breakout above the neckline resistance of Rs 15240 levels traders can add to their long positions with a revised stop loss of Rs 14853 levels and hold for the above mentioned implied targets.