SHUBHLAXMI NCDEX

January 24, 2012: Dhaniya (NCDEX 1st month): 20-WMA @ 4605

As evident from the chart, the commodity is nearing the 20-weekly moving average, which is currently placed at Rs4,605. Hence this would be a key make or break level and once the price closes above this area on a weekly basis it is likely to target Rs4,865/5,211. The momentum cycles are in buy mode on weekly and daily time frames suggesting bulls have an upper hand in the short and medium term. Hence any correction should find support at the 20-daily moving average, which is currently placed at Rs4,120.

Gram chana (NCDEX 1st month): Resistance ahead

Chana

As evident from the chart, the commodity is nearing the key resistance zone of 50% retracement level, which is currently placed at Rs3,276, and the gap area (Rs3,297). Also the 40-daily exponential moving average is placed at Rs3,295 and hence it is the major hurdle for bulls going forward. On the lower side, it is likely to retest the lower trend line around Rs3,044 in the short term.

Soy bean (NCDEX Feb month): 50% @ 2437

Soya Been

As evident from the chart, the commodity has been correcting from the high of Rs2,659 and is now nearing the key support zone of 50% retracement level of Rs2,214- 2,660 swing. The daily momentum indicator is in sell mode but is likely to finish its down cycle in the coming few days. Also, the prices are nearing the lower daily Bollinger Band that is currently placed at Rs2,460. Hence the area of Rs2,437-2,460 is likely to act as a key support area in the short term. Aggressive traders can accumulate in this area with a stop placed at Rs2,385 (61.8% retracement) on a closing basis.

The analysis of the daily chart of MCX Lead reveals bullish developments. The base metal is forming a bullish price pattern called inverted head and shoulders pattern. The rise from 72.55 to 84.85 was a leading diagonal, whose 61.8% retracement has already been achieved. The daily MACD is in sync with the bullish formation. Near the equilibrium line, the momentum indicator has taken support at the nine-period moving average and is set for a new cycle up. Once Lead breaks out from the bullish pattern, the conservative head and shoulders pattern’s target will be 90. However, to reach the target Lead will have to overcome the hurdle of 21 daily exponential moving average (DEMA; 81.5) and 50DEMA (83). In case the right shoulder’s low i.e. 77 is broken, the reversal of the view can be assumed.