CNX-BANK INDEX ( A TECHNICAL VIEW )----12-4-2015

CNX BANK INDEX

CLOSED AT 18800.85 ON 10-4-2015.

SUPPORT: -18736.65 / 18728.20 / 18688 / 18489.60 / 18226 / 18211 / 17719 / 17502.

 RESISTANCE: - 18923.60 / 19131 / 19377 / 19464 / 19532.70 / 19876.

Bank Index made recent major top at 20541.65 on 4-3-2015 and thereafter corrected and made bottom at 17719.35 on 27-3-2015 and then in eight trading session it went up by more than 1170 points and  made a high of 18896.50 before closing  the week at 18800.85. It is above its short and long term moving averages but below some of its medium term moving averages but Nifty & Bse-Sensex are above all its averages, it had retraced around 42% of the total fall from 20541.65 to 17719.35 whereas Nifty & BSE-Sensex have retraced almost up to  61.8%, furthermore it is still below its critical point of 18923.60 whereas Nifty & BSE-Sensex are above their critical points , therefore in comparative study It is not showing   that strength which Nifty & BSE-Sensex is exhibiting . However since it is above its short term moving averages it may move up and catch up with other indices in coming days but going up from here it will have very tough resistance in the range of 18923.60---19377---20125 and piercing through this wall of resistance looks hugely tough at this juncture.

It is important to mention here that if it is a pull -back rally which it seems to be then it may end here or may be around 18975---19377 level and to prove it otherwise it has to cross the above mentioned wall of resistance and then go beyond 20541.65 level for resumption of the smooth up journey again, which seems very difficult as of now. 

In view of the above observation one should be circumspect in their trade position and specially long call should be handled with caution, considering that it is not showing that strength which other indices are showing and tough resistance range ahead I would prefer not to initiate long call at least below 18923.60 instead after watching the market for some time I would try to take sell call at appropriate point but below 18923.60 and then below 19377 with a stop loss of above 18950 and 19400 respectively. I would suggest to avoid fresh long call if it consistently starts trading below 18728.

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  wait for fresh long trade till it closes above it critical point of 18923.60 and sustain it for 3-4 days. Please avoid fresh long call if it consistently starts trading below 18728 mark.

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.