CNX-Bank Index-Technical View For The week Starting From-28-7-14

CNX-Bank Index closed at 15322.25 on 25-7-2014

Range for the week ended 25-7-14 was :-15626.90----15272.45

SUPPORT: -  15288.30 / 15272.45 / 15241.90 / 15089.30 / 14965 / 14858.90 / 14857.50 / 14770  / 14709.30 / 14338.65 /   

RESISTANCE: - 15341.90 / 15461.55 / 15568.05 / 15592.80 / 15626.90 / 15725.80 / 15742.05/ 15930 / 16308 /.

(Figures in bold are important)

Index opened firmly for the week under review and made a high  of 15626.90 for the week but could not sustain the up move and made a low  at 15272.45 before closing the week near the low point of the range at 15322.25.As you are already aware that index has been grossly under- performing off late, it has failed to cross its previous high of 15742.05 whereas nifty has made new highs. It exhibits weakness therefore one should be very cautious in the long trade preferably long call is a avoid for me now.

TECHNICAL VIEW

1. ON DAILY CHART:- It made a bottom on the line chart at 14447.20 on 11-7-14 and on the bar chart at 14338.65 on 14-7-14 and moved up vertically  and made closing  top at 15534.35 on 24-7-14 and top on the bar chart at 15626.90 on 23-7-14,since it moved up vertically ,so if it corrects downward now then that correction could be vertical too, going down it can find retracement support at these levels 15322.87 / 15134.78 / 14982.77 / 14830.76 / 14660.71,and going up it will face stiff resistance in the range of 15568—15742.05.

Please note that the negative divergence is still there and index has also broken the upper band of the short term DMA range which is between 15366--15203(it changes every day, I will be updating it)for 28-7-14,so the divergence may come into play, therefore I suggest to avoid fresh long call below 15366 for 28-7-14 and below 15272.45 for sure  for the entire week starting from 28-7-14.

2. ON WEEKLY CHART:-It has made bottom on the line chart at 14447.20on 11-7-14 weekend and on the bar chart at 14338.65 on 18-7-14 weekend and top on the line chart at 15389.35 on 18-7-14 weekend and on the bar chart at 15626.90 on 25-7-14 weekend, therefore these points are broad range of  support and resistance for the index on the line and the bar chart and for in between support and resistance points please refer the figures mention above.

The strong negative divergence are visible for last couple of weeks and if it comes into play then it can drag down the index to at least 13500 level ,chances of which are brightening as it has broken the upper band of the short term DMA on the daily chart. The weekly short term DMA range is between 15146---14869 for the coming week. The negative divergence could only be negated if the index comfortably moves above its short term DMA . Kindly note that looking at the negative divergence and short term DMA violation on the daily chart, I suggest extreme caution in the long trade and personally long trade is a avoid for me as of now .

 REMARKS:-Long term trend is still intact but avoid long calls for now and below 15272 for sure ,aggressive trader can try short call below 15272 with a stop loss of 15330 .

 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, target and trailing stop loss points. DO NOT TRADE WITHOUT STOP LOSS

                                              Note:-PRICE STATED HERE IS OF SPOT MARKET

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