CNX-Bank Index-Technical View-9-7-14

CNX-Bank Index closed at 14997.50 on 8-7-2014

SUPPORT:  14946 / 14940.35 / 14858.90 / 14857 / 14709.30 /14468.10 / 14301.30 / 14063.60

RESISTANCE: - 15059.10 / 15288.80 / 15241.90 /15341.95 / 15556.15 / 15568.05 / 15592.80 / 15589.50 / 15660.05 / 15725.80 / 15742.05 / 15927 / 16266.


(Figures in bold are important)

Index opened on a positive note today and then plunged down sharply and made low of 14889.35 for the day before closing the day above 100 point from the low. In today’s down move it has broken all weekly support levels and monthly support level of 15288.80&15241.90for July-14 ,it has also broken all short term moving averages and bottom on the bar and closed just above the last closing bottom of 14992.35,today’s move indicate gross weakness in the index and suggest that this down move may continue for few days but since one major event of General Budget is lined up for 10-7-14 nothing can be said convincingly. Therefore avoid long calls completely during this week if index trades below 15059.10.Only try long call if it stays above 15059.10 with a stop loss of 15,000.

You would recall that the index had given negative divergence (see my earlier post) on the chart earlier and since it is below its all short term DMA again therefore the negative divergence could come into play and may break the level of 14793.40, so to negate the divergence it has to move above its short term DMA which is placed at 15308 for 9-7-14.

Seeing today’s move index is expected to go down, if it does  then it could bounce back from  these levels 14857.50 / 14709.30 or from 14843--14588  which is one of the long term moving average range for 9-7-14(it keeps on changing every day). The aforesaid range is a very critical support area and if index breaks it and starts trading below it then it will be a matter of concern, therefore one can try long call near the moving average range considering the  range as potential support but off course with an adequate stop loss..

 REMARK:-Long term trend is still up but avoid long call till it is visible that the fall in index is arrested. Please use support and resistance point as entry, exit and trailing stop loss point to make your trade profitable.

Contact me for strategic guidance to enter and exit the trade