Monday, March 21, 2011

Pepper recovers on short covering

The pepper futures showed recovery on previous losses on Saturday. Futures started the day on negative note on extended selling pressure.
However, prices reversed the directions on short covering at lower levels which supported the prices.
Exporters are expecting export inquires to arrive in coming week which further added to the upside. Thus, futures ended on slightly positive note.
Outlook
The pepper April futures are projected to extend the positive trend initially on active buying interest on Monday. However, later on profit booking at higher levels might pull down the prices.
Prices quoted by India in international market moved up to $5275 per ton which was slightly higher than the prices quoted in other origins
At prevailing prices in spot exporters bought good amount of pepper which turned the sentiments towards bullish side
Kerala sales tax department has tighten the transport of pepper to other states thus arrivals are remaining limited at spot market
According to derivative analysis, prices are rising while volumes and open interest are falling. Market is running out of traders willing to open or hold an open long/buy. Traders are liquidating both loosing short positions & closing winning long positions. A higher probability the market is set to retrace in price lower at some point forward