Outlook bearish for NCDEX-Soybean

Soybean prices have been under pressure over the last three weeks. The soybean futures contract on the National Commodity & Derivatives Exchange (NCDEX) has slumped about 10 per cent from its high of ₹3,070 a quintal recorded in the last week of April to the current levels of ₹2,780. Concerns of a bumper supply both globally and on the domestic front have been dragging soybean prices lower.


On the charts, the outlook is negative for the NCDEX-Soybean futures contract. The strong downtrend that has been in place since April 2016 from a high at around ₹4,300 remains intact.

Though this downtrend halted at around ₹3,000 in November, the contract failed to witness a strong upward reversal from there.

Subsequently, the contract declined below ₹3,000 during the start of this year and continues to trade well below it.

The near-term view is bearish. The region between ₹3,000 and ₹3,100 is a key resistance for the NCDEX-Soybean contract. A strong break and a decisive weekly close above ₹3,100 is needed for the downside pressure to fade. But such a strong rally looks less probable at the moment.

As such a fall to ₹2,670 or ₹2,650 can be seen in the short term. An intermediate bounce from ₹2,650 to ₹2,850 cannot be ruled out. But an eventual break below ₹2,650 will increase the likelihood of the contract extending its fall to ₹2,500 or ₹2,400 thereafter.

A key long-term trendline support is poised at around ₹2,400. So, the downtrend that is in place now can be expected to halt there.

A strong upward reversal from ₹2,400 can take the contract up to ₹2,600 or to even higher levels thereafter.

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

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