Soybean prices have been falling over the last few weeks. The Soybean futures contract on the National Commodity and Derivatives Exchange (NCDEX) hit a high of ₹3,915 per quintal this January and has been falling since then. The contract has tumbled over 7 per cent from this high and is currently trading at ₹3,632 per quintal.

The downtrend that began in January remains intact and there is room for a further fall in the short term. The 21-day moving average, at ₹3,705, has been capping the upside for the contract since February. As long as the contract trades below this hurdle, a fall to ₹3,500 or ₹3,450 is possible in the short term.

The region between ₹3,500 and ₹3,450 is a crucial support for the contract. A break below this support zone looks less probable as fresh buyers may emerge at lower levels. A strong upward reversal from this support zone can take the contract higher to ₹3,600. A further break above ₹3,600 will then increase the likelihood of the contract revisiting ₹3,800 and ₹3,900 levels.

A strong break and a decisive close above ₹3,900 will then boost the momentum. Such a break will then pave way for a fresh rally to ₹4,100 and ₹4,200 over the medium term.

Traders with a medium-term perspective can make use of dips and go long near ₹3,535 and can also accumulate at ₹3,475. A stop-loss can be placed at ₹3,410 for the target of ₹3,850. Revise the stop-loss higher to ₹3,575 as soon as the contract moves up to ₹3,625.

Note: The recommendations are based on technical analysis and there is a risk of loss in trading.

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