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Between April and September this year, the price of futures contract of soybean on the National Commodity and Derivatives Exchange (NCDEX) was largely held within ₹3,700 and ₹4,000. But in early October, the contract gathered enough strength to establish a rally that took it out of the trading range, i.e. the futures broke out of the crucial level of ₹4000.
The bull trend stood intact, and consequently, the January futures contract of soybean marked a high of ₹4,571 in mid-November. However, this price level acted as a strong resistance and unable to extend the rally, the uptrend started to lose momentum. What followed was a price decline wherein the contract marked a low of ₹4,224 before three weeks.
But the support at ₹4,225 stood strong, and eventually, the trend reversed and it has been rallying over the past couple of weeks. After pausing for a short while near the prior high of ₹4,571, the contract broke out of this level and registered a fresh high of ₹4,621 on Thursday, turning the outlook positive.
Considering the above factors, traders can initiate fresh long positions in NCDEX-Soybean with stop-loss at ₹4,500 and look for a target of ₹4,775.
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