CNX--BANK INDEX---A TECHNICAL VIEW---11-5-2015

CNX-Bank Index

CLOSED AT  17796.60 ON 8-5-2015.

Range for the week ended on 8-5-2015 was:-18586.30-----17246.55.

SUPPORT: -17738.90 / 17719.35 /  17502.45 / 17246.55 / 16561.

RESISTANCE: -17917 / 18075 / 18211 / 18226 / 18270 / 18338.10 / 18417.50 / 18433.80 / 18586.30 / 18736.65 / 18728.20 / 18875.45 / 18923.60 / 19038.50 / 19166 / 19376.85 / 19532.70. 

 (Figures in bold are important)

Bank Index made temporary short bottom on 7-5-15 at 17246.55 around its strong support area of 17502--300(see my post dt-7-5-2015) and closed the week at 17796.60.  Despite the poor performance in the just concluded week, it is still showing better strength on the technical chart in comparison with Nifty & BSE-Sensex. The on- going up move seems to be a pull back rally of the recent fall   and this rally may get exhausted in the range of 18100--18470 in a day or two, but if it moves above 18470 mark and sustain then this rally may extend up to 18600---18750 chances of which are looking slim at this point of time.  I expect this rally to fizzle out in the range of 17975---18300 or earlier.

The trend is down for sure, therefore it is suggested to avoid positional long call ,but the day trader who want to take advantage of the on going relief rally can try long call above 17796.60 for a target of 17950---18075----18300, but please get alerted below 17738 and exit long trade if it consistently starts trading below 17719. Since it is in short and medium term downtrend and long term up-trend is threatened, therefore I, personally would not like to go for long call instead, I would look for opportunity to try sell -call on the rise at proper points or below 17719 for sure with a stop loss of above 17750. I would also like to mention here that, if it breaks 17500 level and maintains below it for few day then it can drag down the index to 16500-16000 level very fast, therefore fresh short position can be added below this mark with a stop loss of above 17550. Please also note that it is tremendously weak on the technical chart and the major technical parameters are indicating that it may break the recent bottom of 17246.55 it made on 7-5-2015 and may seek much lower levels in coming weeks and months. Therefore long call should be handled with extreme caution as because technically it is clearly sell on the rise market.

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.

REMARKS:- Long term up –trend is severely threatened and the on-going up-rally is just a pull back of the recent fall. Please note that in the weak market these up rally could end abruptly, therefore it is suggested to avoid long call. However day trader can try both long and short call depending on the price movement and 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.