The November futures contract of soybean on National Commodity and Derivatives Exchange (NCDEX), which established a leg of uptrend in the beginning of October, breached the resistance of ₹4,000 last week. The breakout has resulted in the contract confirming an ascending triangle pattern – a bullish indication.
The contract is likely to advance from here and rally to ₹4,350 in the near-term. Beyond that level, it can possibly rise to ₹4,400. But if it reverses and declines, the price area between ₹4,150 and ₹4,180 can be the support band. A break below ₹4,180 can turn the outlook bearish for the contract.
Nevertheless, the price action is bullish and supportive of the positive bias, the daily relative strength index is pointing upwards and lies above the midpoint level of 50. The moving average convergence divergence indicator on the daily chart is charting an upward trajectory and remains in the bullish zone. Also, the price is well above the 21-day moving average.
So, traders can be positive and go long in declines with stop-loss at ₹4,150.