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The October futures contract of soyabean in the National Commodity and Derivatives Exchange (NCDEX), which declined last week, took support at ₹3,810 and has been appreciating since the beginning of the current week.
The price rallied above the 21-day moving average (DMA) and is currently testing the crucial level of ₹4,000. A solid breakout of this level can attract more buyers, there by lifting the contract to ₹4,120. A breach of this level can take the contract to ₹4,180.
On the downside, the price band between ₹3,890 and ₹3,900 can be a support band.
Supporting the bullish bias, the daily relative strength index is showing a fresh uptick and has crossed over the midpoint level of 50 this week. The moving average convergence-divergence indicator in the daily chart is now turning its trajectory upward and showing signs of fresh bullish momentum being built up.
Though there are indications in favour of the bulls, ₹4,000 can act as a hurdle. So, traders can initiate fresh long positions with stop-loss at ₹3,890 if the contract decisively breaches ₹4,000.
Note: The recommendations are based on technical analysis.
There is a risk of loss in trading
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