Guar seed back-to-back futures contracts on the National Commodity Derivatives Exchange (NCDEX) have been trading within a range since mid-November last year. So it fluctuates between Rs 5,680 and Rs 6,400.
Technically, the next leg of the trend remains uncertain until the contract exits this range. If the contract breaks below the Rs 5,680 support, the short-term outlook will turn bearish, with prices up to Rs 5,285 may fall. On the other hand, if the deal breaks above INR 6,400 he could rise towards INR 7,000.
Nevertheless, guar seed futures are trading at around Rs 5,730. Since it is trading near the bottom of the range, a rally from there is likely.
Traders can hold long positions at the current level of ₹5,730. The stop loss is ₹5,525. Once the contract reaches ₹6,100, he tightens the stop loss to ₹5,750. As this is the support level and a downside is possible from here, we exit the long position at INR 6,400.