Chilli plunges on active selling


The Chilli futures extended the bearish trend on active selling on Friday. Futures started the day on negative note continuing the losses on heavy selling pressure.
However, prices showed small recovery on short covering at but failed to sustain the gains and futures ended the day on negative note.
Chilli June futures are projected to trade slightly down to flat in initial hours on Monday. Continued selling at previous huge gains is expected to be seen at futures today. However, exports to Sri Lanka and Bangladesh are quite good which might limit the losses.
Arrivals at spot market of Guntur were reported around 60,000-80,000 bags (Each bag= 40Kg.). Spot market of Guntur will be closed in May for a month due to rise in mercury levels.
As per news sources, export demand from Bangladesh, Malaysia is good which is supporting the prices.
According to traders, around 40 lakh bags have arrived till now and further 30-40 lakh bags might come till May. As per market sources, fresh crop arrivals are likely to remain till early May.
According to derivative analysis, prices are falling while volumes and open interest rising. If prices are in a downtrend and open interest is on the rise, chartists know that new money is coming into the market, showing aggressive new short selling. This scenario will prove out a continuation of a downtrend and a bearish condition.
Courtesy: Karvy Commtrade Ltd.



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