CNX-Bank Index-Technical View For The Week Starting From-14-7-14

CNX-Bank Index closed at 14447.20 on 11-7-2014

Range for the week ended 11-7-14 was :-15592.80----14406.65

SUPPORT: - 14406.65 / 14301.30 / 14240 / 14063.60 / 13885 / 13489 / 13414.30 / 12738.60

RESISTANCE: -14595 / 14709.30 / 14770 / 14858 / 14946.85 / 15034 / 15241.90 / 15288.80 / 15341.95 / 15568.05 / 15592.80 / 15725.80 / 15742.05/

(Figures in bold are important)

Index   had a volatile and wild swing of 1186 points during the week under review and it made an   high of 15592.80 and a low of 14406.65 for the week before closing the week near the low at 14447.20, this kind of move indicate that up  momentum has broken and it may seek lower level in the coming days for sure. However in between short up move on intra -day basis or on closing basis could be there.The bias is downward.

Technically index is badly placed, it has broken important bottoms on the line and the bar chart, it is below all its monthly(for July-14) support levels ,it is also below its all short term moving averages and today it has just broken its one of the long term moving average range which was in the region of  14934—14669 (it keeps on changing every day, as of  now it will rise with each passing day)which is a bad sign, now the  next important long term average support would be near 12781--13185 range .The very strong support for the index for the rest of this year is at 13414.30,if it breaks it  and stays below then it will be really  a matter of concern.

 Furthermore so long the negative divergence was there on the daily chart but now it has appeared on the weekly chart too and it could be devastating if it comes into play ,chances of which are looking reasonably good at this point of time and if it does then index could break 12842 level ,kindly note that negative divergence could only be negated if index give sharp up move and stays above its short term DMA which is at 15163  for 14-7-14(it keeps on changing every day, as of now it will move down with each passing day)  for reasonable period of time, chances of which are looking slim at this point of time, therefore try long call above short term DMA only .Avoid long call completely below 14406.65 during next week starting from 14-7-14 .The strong resistance for the month of July-14 is at  14770 / 15241.90 & 15288.80 

 The technical parameter suggest that index  could hit the range of 13000-13450 in coming days, therefore if it goes down then review the situation around the said range to ascertain whether the on -going fall has been arrested or not. 

REMARKS:-Long term trend is still intact but short term trend is down, therefore I suggest to avoid long call completely till it is visible that the on -going correction is over, so as of  now one can try short call on the rise at appropriate level with an adequate stop loss . Kindly note that make your cost your stop loss in favorable trade and then trail it as the price moves up/down to gain maximum profit and avoid losses. Use support and resistance levels as entry, exit and trailing stop loss points. DO NOT TRADE WITHOUT STOP LOSS

Note:-PRICE STATED HERE IS OF SPOT MARKET

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