The price of Soya oil witnessed a sharp correction from the highs of Rs 659.45 levels as on 14th Sep, 2011 and broke down below its key support zones placed between the Rs 639--Rs 637.40 levels.
Traders would also note from the chart above that the recent correction was on the back of strong surge in volumes, indicating strong supply pressure in the counter.
Some of the other technical factors that support the bearish outlook are that the price is now trading below its moving averages and the MACD indicator is also trading in sell mode.
We believe that the price of soya oil can test levels of Rs 624.50 / Rs 621.75 levels.
We recommend traders to sell between Rs 629.25--Rs 631.50 levels with a stop loss placed above Rs 635.65 levels for downside targets mentioned above.
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