Sell NCDEX Chana near Rs 3250-3280; tgt Rs 2850: Way2Wealth

Way2Wealth's special report on NCDEX Chana -

Chana has completed the bearish head and shoulders chart pattern on the daily chart, over a time span of three months. More the time spent in the chart formation, higher is the reliability. Prices have breached the neckline support in this week at 3285 levels coupled with strong volumes. Moreover, it has closed below the neckline support for three consecutive days. The neckline support turned resistance is pegged at 3275 retest of the same will provide favorable trade set-up for the bears.

RSI (14) has also completed the similar pattern, which is supporting our view in it. As it has entered the neutral zone from the oversold, it is indicating some bounce in the counter which will be restricted at the neckline resistance.

MACD is balanced in the negative territory and below the reference line, signifying bears are having upper hand.

Sell Strategy: NCDEX Chana -

Sell in the range of Rs 3250-3280.
In the event of adverse movement, exit at Rs 3426 with a loss of Rs 17,600.
Look for final exit around Rs 2850 with profit of Rs 40,000.
Place trailing stops using Parabolic SAR to protect existing profits.
Risk/Return ratio: 1:2.2
Time frame: 1 – 2 Months.

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