CNX NIFTY---- A TECHNICAL VIEW (IT SEEMS PAINFUL DAYS AHEAD ) 29-3-2015

CNX NIFTY

CLOSED AT 8341.40 ON 27.3-2015

SUPPORT: -8282.70 / 8272.80 / 8269.15 / 8180 / 8160 / 8147.95 / 8065.45 / 7961.35 / 7723.85.

 RESISTANCE: - 8470.50 / 8626.95 / 8669.45 / 8788.70

 As expected nifty topped out at 9119.20 on 4-3-2015(see my last post dt- 7-3-2015) and correction began and it has corrected by 850 points till 27-3-2015 on intra day basis in 16 trading session which is huge and even now giving no sign of reasonable or smart recovery instead exhibiting gross weakness. Technically also it is running below its all short, medium and some long term moving averages which is a bad sign, short and medium term moving averages are inching down every day for negative crossover and if it happens it  could be devastating, furthermore RSI is also showing negative divergence on daily weekly and monthly chart indicating that it could seek much lower levels from here in coming days if it continues like this, therefore overall technical view is that it is tremendously weak now and all major indicator suggest that down move should continue for quite some time, however if nifty has to come out of this then it has to stage a powerful recovery now and move reasonably above 8626.95 mark and sustain but chances of which are looking extremely bleak at this point of time.

It has also broken the upper band of the long term moving average range therefore the long term up-trend is also threatened. The range of long term DMA is between 8450---8068 now (it changes every day with price movement) and if it breaks 8068 level and consistently starts trading below this mark then it could turn into a bear market and then this on- going correction could be much painful value wise & time  wise  and it may last for at least 6- 8 months and nifty could come down to unexpectedly lower levels, however in between short up –rally cannot be ruled out. Therefore for the long term up trend to stay intact it has to remain reasonably above the upper band of long term DMA which is at 8450 now.

In view of the above observation, I suggest to stay away from the long trade till it gives visible indication of bottoming out instead try short call on the rise. It is clearly sell on the rise market now.  

Kindly note that profit should also be booked in trade from time to time at the appropriate points so that you can take advantage of the market swings.

REMARK:-Long term up trend still intact but threatened. Looking in totality my bias is completely on the downside as of now, therefore long trade is completely ruled out for me now and I would suggest to sell on the rise.

  

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.

Contact me for strategic guidance to enter and exit the trade.