CNX-Bank Index-Technical View For The week Starting From-18-8-14

CNX-Bank Index closed at 15089.65on 14-8-2014

Range for the week ended 14-8-14 was :-15144.75---14807.

SUPPORT: - 15089 / 14933  / 14858.90 / 14857.50/ 14709.30 / 14709.10 / 14338.65 / 14063.60 / 13414.30. 

RESISTANCE: -  15137.60 / 15144.75 / 15267.60 / 15499.70 / 15568.05 / 15592.80 / 15626.90 / 15725.80 / 15742.05/ 15930 / 16308 /.

  (Figures in bold are important)

Index opened on a positive note for the week under review and gradually moved up but before that  made a low of 14807 and then high of 15144.75 for the week but could not cross the previous week’s high of 15343.50 and closed at 15089.65 for the week. Index has been grossly under -performing for quite some time now, although index moved up during the week but it is still not showing sign of strength, therefore I suggest to avoid long trade.

TECHNICAL VIEW

1.      ON DAILY CHART:-There is no significant improvement in the chart and it is still below the upper band of the short term DMA range and the range is between 15203---14991(it changes every day) for 18-8-14. Therefore avoid long call till it crosses the DMA upper band range and stays above that for 3-4 days

2.      ON WEEKLY CHART:-  It is still showing  weakness on the weekly chart but it closed the week just above the upper band of the short term DMA range and the range is between 15079---14337 (for the next week) starting from 18-8-14 ,therefore I suggest to avoid long call below 15079 for sure for the coming week.

The strong negative divergence are still there and if it comes into play then it could take index down to 14447.20,12842 & 12551   levels but as I always say that divergence should be viewed in sync with the moving average placements and since it is still below the upper band of the short term DMA on the daily chart and just above the upper band of the DMA on the weekly chart therefore chances of divergence coming into play looks 50-50 at this point in time. The divergence could only be negated if it bounces back above the upper band of the short term DMA range on the daily chart first. The negative divergence and index below the upper band of the short term DMA suggest caution in the long trade. Technically it is still a sell on the rise market below 15355.

REMARK:- Long term trend is still up but avoid long calls completely till it moves above the upper band of the short term DMA range and stays for 3-4-days.

Kindly note that make your cost your stop loss in favorable trade and then trail it as the price move 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

Contact me for strategic guidance to enter and exit the trade