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Soybean prices have been under pressure over the last couple of weeks. The soybean futures contract on the National Commodity and Derivatives Exchange (NCDEX) made a high of ₹3,838 per quintal on May 23 and has been in a free fall since then. The contract has tumbled 8 per cent from this high and is currently trading at ₹3,528 per quintal.
Outlook
The fall signifies that the uptrend which was in place since November last year has come to an end. Also, turned the outlook bearish for the NCDEX-Soybean contract. Immediate resistances are at ₹3,550 and ₹3,590 which are likely to cap the upside in the near term. As long as the contract remains below these resistances, the downtrend will remain intact. A fall to ₹3,450 is possible in the short term. A strong break below ₹3,450 will then increase the likelihood of the contract tumbling to ₹3,380 or even ₹3,330 over the medium term.
Traders can go short at current levels and also accumulate at ₹3,550 and ₹3,585. Stop-loss can be placed at ₹3,625 for the target of ₹3,400. Revise the stop-loss lower to ₹3,490 as soon as the contract moves down to ₹3,470.
The contract will get a breather if it breaks above ₹3,600 decisively. Such a break will ease the downside pressure. It will also negate the bearish outlook mentioned above and will take the NCDEX-Soybean futures contract higher to ₹3,670 or even ₹3,700.
Note: The recommendations are based on technical analysis and there is a risk of loss in trading.
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