Chilli ends down on short selling


The Chilli futures extended the down trend for 4th consecutive session on Monday. Futures started the day on negative note on extended selling pressure.
However, prices took small recovery but failed to sustain the gains and fell sharply on strong selling interest.

The Chilli April futures are projected to continue the losses on strong selling interest on Tuesday.
However, prices are likely to witness a smart recovery on fresh buying at lower levels. Nonetheless, overall prevailing sentiments might weigh on sentiments.
As per news sources, export demand is likely to remain sluggish for chilli as most of the importing countries has tighten their food safety standards to zero tolerance level.
As per data released by Spices board, chilli exports during April- January 2010-11 stood around 2,00,000 tons up by 22% compared to same period last year.
As per trade sources, Chinese chilli crop has be improved by 10-15% this year from last year’s losses. According to derivative analysis, prices and open interest are falling while volumes are rising.
Market is running out of traders willing to open or hold an open Short/Sell. Traders are liquidating both loosing long positions & closing winning short positions. A higher probability the market is set to retrace in price lower at some point.



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