Soybean prices have been moving in a sideways range over the last couple of months. The soybean futures contract on the National Commodity and Derivatives Exchange (NCDEX) has been stuck in a narrow sideways range between ₹3,150 and ₹3,400 per quintal since the second week of August. Within this range the contract is currently poised at ₹3,212 per a kg.

Outlook

The NCDEX-Soybean futures contract is likely to retain its sideways move for some more time. A breakout on either side of ₹3,150 or ₹3,400 will then determine the next move. The bias on the chart is bearish.

The 21-day moving average has been restricting the upside over the last few days. Also, the 21-week moving average is on the verge of crossing below the 200- and 55- week moving averages. These are negative signals indicating that the upside could be limited in the coming days. It also increases the possibility of the contract breaking below ₹3,150. Such a break can trigger a fresh fall to ₹3,050 or ₹3,020 over the short term. The region between ₹3,050 and ₹3,020 is a key support. If the contract manages to bounce from this support zone, a relief rally to ₹3,150 or ₹3,200 can be seen thereafter.

But a strong break below ₹3,020 will then increase the likelihood of the down-move extending to ₹2,950.

The bearish outlook will get negated if the contract manages to breach and record’s a decisive weekly close above ₹3,400. Such a break can take the contract higher to ₹3,450. Further break above ₹3,450 will then increase the possibility of the up-move extending to ₹3,600.

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

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