CNX-Bank Index-Technical View For The Week Starting From-1-9-14

CNX-Bank Index closed at 15740.40on 28-8-2014

Range for the week ended 28-8-14 was :-15973.35---15503.40

Range for the month of August-2014 ended on 28-8-14:--15973.35---14709.10

SUPPORT: -15725.80 / 15626.90 / 15592.80 / 15568.05 / 15499.70 / 15267.60 / 15137.60 15089 / 14933  / 14858.90 / 14857.50/ 14709.30 / 14709.10 /

RESISTANCE: -  15742.05 / 15817.55 / 15865.30 / 15973.35 /16200 /  16350 /.

  (Figures in bold are important)

Index opened on a flat note for the week under review and made a new all time high of 15973.35 and thereafter made a low of 15503.40 before closing the week at 15740.It did not show the required strength but still it is buy on dip as of now but be alert in long call below 15650 and avoid fresh long call below 15650& 15448.

TECHNICAL VIEW

1.      ON DAILY CHART:- It looks ok on the daily chart and as of now it is buy on dip, although it is above the upper band of short term DMA range of 15650—15300(it changes every day) for 1-9-14 but since it very close to it, therefore  be alert in long trade and avoid fresh long call if it starts trading below 15650 and get out of the long trade if closes below 15310 and stays. It has made recent bottom of 15448.90 so avoid long call below this point for sure.  Going up it will face tough resistance at 15840 / 15970 &16105.

2.      ON WEEKLY CHART:- It is ok on the chart . Furthermore it is way above  the upper band of the short term DMA range which is between 15300--14590(for the next week) starting from-1-9--14

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 index is decisively above the upper band of the short term DMA on the daily chart as well as on the weekly chart, therefore negative divergence will take a back seat as of now till it breaks the short term DMA range lower band  at least on the daily chart again.

3. ON MONTHLY CHART:- It is ok on the chart  but it has been continuously moving up for the last seven months and gave a stupendous rise of 6029.35 points. It rose from 9940 in Feb-14 to 15973.35 in August-14, therefore correction on the monthly basis looks imminent in the month of September-2014,therefore be cautious in long trade

 REMARK:- Long term trend is still up, therefore I would suggest  to adopt buy on dip strategy at appropriate level with proper stop loss. Please be alert in long call below 15650 and if it closes below 15448 then  for sure because then it may go in for deeper  down correction.

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