The continuous futures contract of cottonseed oilcake (COCUDAKL) on the National Commodity and Derivatives Exchange (NCDEX) stayed bullish since the beginning of this year and marked a fresh high of ₹3,200 in mid-August. However, the contract turned bearish resulting in a sharp decline from ₹3,200 and marked a low of ₹2,315 in September. It found support at this level and there was a bounce off this price. But the rally was limited and the contract entered a consolidation phase. That is, it has been largely trading in the sideways band of ₹2,400 and ₹2,635 since last week of September.
A fortnight ago, the contract broke out of the resistance at ₹2,635, opening the door for further strengthening. Since then it has been gradually gaining and last week it registered a fresh high of ₹2,830 from where it moderated a bit. Currently, the futures is hovering around the key support of ₹2,750. Subsequent support is at ₹2,675. The contract can be expected to resume the uptrend from current levels or at ₹2,675 and a decline below this level is unlikely. A recovery from here can take the contract to ₹2,920.
Given the above factors, one can go long at current levels and accumulate when price drops to ₹2,675. Keep initial stop-loss at ₹2,600 and revise it up to ₹2,680 if the contract crosses over ₹2,830. Exit the long positions when futures rally to ₹2,920 as the price band of ₹2,920 - ₹2,950 is a strong resistance.