The key observation to be made on the chart above is that, the prices of Soya Oil ref has been
taking support at the rising trendline that has been taking shape since 29th Mar,2011.
On the previous three occasions, the prices have witnessed a smart rally after it took support at the rising trendline.
The recent correction from the highs of 670.40 levels as on 26th Jul, 2011 was also on the back of declining volume which is a clear indication that the prices weren’t under any real supply pressure.
Thus, we believe that sustenance above the trendline will see the prices of soya oil rally towards the Rs 659 / Rs 662.50 levels over the upcoming sessions of trade.
The MACD indicator s also trading in bullish mode and doesn’t depict any signs of weakness.
We recommend traders to buy between Rs 655--Rs 650 levels with a stop loss placed below Rs 647.80 levels for upside targets of Rs 659 / Rs 662.50 levels, expected to be achieved over the upcoming 2-3 sessions of trade.
NCDEX SOYAOIL REF. AUG. CONTRACT OPEN Rs 652.70 HIGH Rs 657.80 LOW Rs 649.00
CLOSE Rs 653.65
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