Nifty-Technical View-21-10-14

NIFTY CLOSED AT 7879.40 ON 20-10-14

SUPPORT: - 7862.45 / 7855.95 /7841.80 /7808.85 / 7784 / 7700.05 / 7593 / 7540.10 / 7422.15.

RESISTANCE:- 7925.15 /7960.50 / 7964.80 /7968.25 / 7972.35 / 8030.90 / 8141.90 / 8160.90 / 8180.20.

  (Figures in bold are important)

Nifty opened with a huge gap up at 7896.95 and made a high of 7905.95 and the then low of 7856.95 for the day before closing the day at 7879.40.Today’s move seems to be a sharp pull back as expected and it has to be seen how it shapes up in next few days. Kindly note that the gap it created today still remains and to fill it up nifty has to come down to 7819.20 level , generally the gap is filled in next 3-4 days ,if not then it is difficult to say when this gap will be filled ,so the next 3-4 days trading is very critical ,furthermore it is still below the upper band of its short term moving averages and the range for short term DMA is between 7955---7844 for 21-10-14,therefore I would not initiate long trade personally till it moves above 7955 and stays for 3-4 days, but since it is above short term DMA  lower band of 7844 and it has strong support at 7840 level otherwise too ,so the aggressive trader can try long call now or on dip with a stop loss of close below 7800 but do not initiate fresh long trade if it starts trading  below 7840 ,one can try short call if it starts trading below 7800 with a stop loss of close above 7840.TRADE CAREFULLY AND  RESPONSIBLY.

REMARK:- Long term trend is still up but it is in intermediate downtrend and today it gave a huge pull back but left a up gap too, so the next 3-4 days of trading would be critical and since it  is below its upper range of the short term DMA also , therefore for me it is wait and watch for next 2-3 days before  initiating any trade .The overall bias is still down as of now.  

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

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