Nifty-Technical Observation-15-12-14

NIFTY CLOSED AT 8224.10 ON 12-12-14

SUPPORT: - 8216 / 8180 / 8160.90 / 7985.65 / 7815.75 / 7723.85.

 RESISTANCE:- 8290 / 8280 / 8272.40 / 8355.65 / 8414 / 8454.50 / 8504.65 / 8535.35 / 8627.

(Figures in bold are important)

Nifty opened on positive note at 8302 and made high for the day at 8321.90 and then steadily move down during the day and made a low of 8216.30 before closing the day near the low at 8224.10, today’s move exhibited tremendous weakness and indicate that this on–going correction could be deep and painful, however in between short pull back could be there but it is not expected to go beyond 8390 level on closing basis. The possible points where it can make bottom for good are 8160 / 8050 / 7950-7900, if it does not make bottom in the range of 7900-7950 and stays below this range then it could possibly retrace the entire up-move it made from 7723.85—8626.95,chances of which are looking reasonably good. Kindly note that if it retraces the entire move and in the same time period then it could bottom out in the range of 7750---7690 and latest by 16^th January-2015 or before also. It is important to mention here that the broad range of long term moving averages of nifty  is between 7920---7500 and if it breaks 7920 level and stays then it will be the first threat to the long term trend, therefore I strongly feel that even if it breaks this point, it is not expected to stay longer below 7920 level and will bounce back.

TECHNICAL OVERVIEW

1.It is running below all its short term moving averages now on daily chart and the range for it is between 8381---8452(it changes every day) for 15-12-14,so avoid long call till it moves above the upper band of the range and stays.

2.The short term moving averages range on the weekly chart is between 8361---8065 for the week starting from 15-12-14..

3. MACD is in sell mode both on daily and weekly chart which is a weak sign.

4.RSI showing negative divergence on daily chart.

Technical parameter are showing weakness, therefore I would suggest to avoid long call completely till technical parameters improves and  bottoming out sign emerges. I would therefore suggest to try short call on the rise at appropriate level and with a proper stop loss or sell if it starts trading below 8216 on 15-12-14 with a stop loss of 8230 for a target of 8150. Avoid long call completely below 8216 for the entire week starting from 15-12-14 but aggressive trader can try long call near 8065 with a stop loss below 8045 for an expected pull back.

  

REMARK:-  :- Long term trend is still intact. Since it is in correction mode I would suggest trader to avoid fresh long call completely instead  try short call on the rise at appropriate level with adequate stop loss, till it gives indication of correction completion.  

 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.

Disclaimer:-The view expressed here are solely of the author and he is not at all responsible in any way for the outcome of the trade you enter based on the above view.

Note: Price stated here is of spot market

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