Nifty-Technical View ---- 17-12-14

NIFTY CLOSED AT 8067.60. ON 16-12-14

SUPPORT: - 7974.55 / 7949 / 7936 / 7856 / 7819 / 7723.85 / 7540 / 7422.15.

RESISTANCE:- 8068.83 / 8160.90 / 8180 / 8216 / 8290 / 8280 / 8272.40 / 8355.65 / 8414 / 8454.50 / 8504.65 / 8535.35 / 8627.

(Figures in bold are important)

Nifty opened on a negative note at 8172.60 and made a high for the day at 8189.35 and thereafter went down relentlessly and made a low of 8052.60 before closing the day near the low at 8067.60. Today it went below the re-tracement level of 61.8% i.e 8068.83 drawn from the top of 8626.95 and bottom of 7723.85  and with the speed it has broken this point  clearly indicate that nifty is going to retrace the entire up –move  in coming days and in all probability may break 7723.95 level for sure,  but last  support on the way to it is in the range of 7950-7900 ,if this range is taken out then it is expected to  make a bottom in the range of 7750—7690 which is very much likely, however in between up rally could be there before a reasonable bottom could be made, I would  therefore suggest that one should not try long call to take advantage of in between short pull back rally, I repeat that long call should be completely avoided till clarity on bottom formation emerges, instead short call can be tried on the rise at appropriate level and with a proper stop loss or below 8050 with a stop loss of 8080 for a target of 7950 on 17-12-14.

 It is important to mention here again that the broad range of long term moving averages of nifty is between 7927---7479(it changes every day) and if it breaks 7927 level and stays then it will be the first threat to the long term trend , if the up trend has to continue it should not stay even below the upper band of the moving average range for a longer time, if it does then it will be a matter of concern  and finally if breaks the lower band of  the moving average and stay for a longer time then the up- trend will be in extreme danger, so keep this  range in mind.

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

 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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