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Since October last year, the price of soyabean futures contract on the National Commodity and Derivatives Exchange (NCDEX) has been rallying with intermittent corrections.
The March contract breached the psychological level of ₹5,000 in the final week of February, providing a boost for the uptrend. Following this, the contract extended the gain and on Wednesday, it broke out of the resistance at ₹5,200. Thus, the contract looks to have positioned itself to post more gains in the upcoming sessions.
Notably, the short-term trend will be up until the price stays above ₹5,000 and the medium-term trend will be bullish so long as the contract remains above the support at ₹4,800.
The bullish bias is corroborated by the daily relative strength index which lies well above the mid-point level of 50; the moving average convergence divergence indicator on the daily chart continues to chart upward trajectory. The average directional index is showing that the uptrend is strong and the price is well above the 21-day moving average, indicating considerable bullish momentum.
Traders can be bullish and initiate fresh long positions on declines with stop-loss at ₹5,150. On the upside, the nearest hurdle is at ₹5,500.
Nevertheless, considering the momentum, the contract will most likely rally past this level and touch ₹5,600.
So, the potential targets are at ₹5,500 and ₹5,600. Supports from the current levels can be spotted at ₹5,250 and ₹5,150.
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