- The setup of Soy oil looks quite bullish both on the daily as well as the weekly charts.
- Based on Elliott wave’s perspective it seems to have completed its wave X in a Regular flat pattern and now it is expected zoom up in its wave Z.
- It posted a monthly positive close which also confirms the same. The rise since the recent lows 593.50 is wave 1/A then it consolidated in its wave 2/B which was a symmetrical triangle and now wave 3/C up has ensued which has a minimum equality target of 670 on the upside.
- The weekly MACD which is still in sell mode, however it has reached the zero reference line from where it is expected to reverse from. The daily MACD continues to be in buy mode showing positive divergence which favors bulls only.
- With the breakout from the triangular pattern it has also crossed it crucial hurdle i.e. 40 WEMA as it had come below it for the first time since the breakout on July 2010. This too increases the probability of winning for the bulls from here on.
- The risk reward ratio is well supporting the bulls as the minimum target is 670 and the stop loss/ reversal is below 609.
Recommendation: Traders are recommended to Buy Soy Oil at the CMP of Rs630 for a target of Rs670 with a stop loss below Rs609.