NCDEX Chilli: Short covering expected; short-term bearish

Overall trend of chilli on the NCDEX for March delivery is looking bearish for short term. For the commodity, some short covering is expected at current levels.
The contract is trading on a negative note at Rs.6684, a fall of 0.3% as of 11.14 AM IST, Friday.
“On the NCDEX, chilli for March delivery is looking bearish for short term. Some short covering is expected at current levels for the commodity,” said Milan Shah, Research Analyst at Commodity Online.
“Traders are advised to follow sell on rise strategy. Support for the commodity is likely to be at 6580 level while 6870 is the resistance,” he added.
The production of chilli for the year is estimated higher than last year and ample stocks are available in the market which is impacting the price of the commodity.
Chilli was trading on a positive bias from the last week of December . Farmers shift to other crops reducing chilli’s acreage due to the low prices of the commodity last year and poor rainfall throughout the season has supported the commodity to trade steady with positive sentiments. But the scenario has changed now.
The total chilli production in the current year is estimated at 2.90-3 crore bags against 2.80 lakh bags last year.