Nifty-Technical View-7-10-14

NIFTY CLOSED AT 7945.55  ON 1-10-14

SUPPORT: - 7925.15 / 7855.95 / 7841.80 / 7808.85 / 7784 / 7700.05 / 7593 / 7540.10 .

 RESISTANCE:- 7960.50 / 7964.80 /7968.25 / 8039 / 8049.85 / 8057.30 /8082 /  8141.90 / 8160.90 / 8180.20.

   (Figures in bold are important)

Nifty opened on a weak note at 7960.50 and made a high of 7977.50 for the day and a low of 7936.70 before closing the week near the low at 7945.55, it is showing gross weakness and indicate reasonable to good fall in coming days and in all possibilities likely to break the bottom of 7841.80 it recently made on 26-9-14,if it breaks it and stays then it may head for further  fall and may find support at 7808 / 7784/ 7700/ 7593 & 7540. It is already making lower top and bottom and also below its all short term moving averages, the range for short term DMA is between 8045—7981 for 7-10-14, therefore long trade is completely ruled out for me till it reasonably bounces back above the upper band of the DMA i.e 8045 and stays for 3-4 days or it start making higher top and bottom. I would prefer to go short on the rise now with a stop loss 8060.I would advice to avoid long call below 7923 for sure for the entire week starting from 7-10-14 and below 7840 for the entire month of Oct-14 however contrarian and aggressive trader can try long call near the critical point at 7923/ 7840 / 7808 7700 & 7540 with an adequate stop loss.

AN IMPORTANT OBSERVATION:-Nifty and most of its constituent stocks are below one of the very important technical parameter for quite some time now and those which are above it are coming close to it and may break it in days to come ,furthermore some of the constituent stocks are below 10-25 %from their recent peak price whereas nifty is just 2.87% below its peak because certain constituents stocks are holding it up but I feel that this gap will be narrowed down in coming days  either by rise in the stock prices or by fall in the nifty, at this point of time fall in nifty looks likely because the stocks which are holding it up is likely to move sideways  to  downward in coming days, this is creating some doubt in the mind although  premature that is this the beginning of a bear market if yes nifty will seek  lower levels from here ,if not then nifty should get past its previous all time high of 8180.20  as soon as possible. SO  BE  WATCHFUL.

REMARK:- Long term trend is still up, but since it below its all short term moving averages therefore long trade is completely ruled out till it bounces back above it again and stay for 3-4 days ,on the contrary one can try short call here on the rise with a stop loss of close above 8060. Avoid impulsive trade .

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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