CNX BANK INDEX--( A TECHNICAL VIEW )--- FOR THE WEEK STARTING FROM---20-4-2015

CNX BANK INDEX

CLOSED AT 18345.55 ON 17-4-2015.

SUPPORT: - 18226 / 18211 / 18024 / 17719 / 17502.45 / 16922.

 RESISTANCE: - 18489.60 / 18875.45 / 18923.60 / 19038.50 / 19166 / 19377 / 19532.70 / 20541.65.

Bank Index is showing tremendous weakness on the technical chart in comparison with Nifty & Bse-Sensex . It is much below its critical points, below its short and medium term  moving averages and to top it all today  it has also  broken the upper band of its long term moving averages range which is between 18362----17185 now (it changes every day with price movement) and this is concerning. Please note that if uptrend has to remain intact it cannot stay even below the upper band of the moving average range for a longer time period. furthermore its Fibonacci Retracements support points are at 18727 / 18534 / 18378 / 18223 / 18030 three of which it has already violated however it may bounce back from any of the remaining points, therefore one should be vigilant around these point but please note that if it starts trading below 18030 then it can break the recent bottom of 17719.35 it made on 27-3-2015.

In view of the above observation it seems that it has good support in the range of 18223---18030 and then 17719---17185 but the technical parameters suggest that the on-going fall may accelerate from here, therefore long call should be avoided  till clarity on correction completion emerges but those who want to try it can try near but above 18030 with a stop loss of below 17950 or near but above 17719 & 17185 with a stop loss of below 17680 & 17100 respectively. I would advice to try long call only either above its long term moving average upper band or near its lower band only, instead I, strongly suggest to try sell call now and below 18321 for sure with a stop loss of above 18400.

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 so long call should be avoided now till bottom formation sign are visible or can be tried near the lower band of the long term moving averages range, instead try sell call as suggested above.

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.