CNX-BANK INDEX--A TECHNICAL VIEW---7-5-2015

CNX-Bank Index

CLOSED AT  17799.55 ON 6-5-2015.

SUPPORT: - 17738.90 / 17719.35 / 17502.45 / 16561.

RESISTANCE: -18145 / 18211 / 18226 / 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 opened on a negative note at 18436.90 and made a high of 18580.10 and in just 35-40 minutes of trade it plunged down by 300 points and thereafter steadily moved down during the day and made a low of 17757.70 before closing the day near the low. It lost 671.89 points today. Kindly note that despite this huge fall it is still holding its recent bottom of 17738.90 & 17719.35 it made on 27.4.15 & 27.4.15 respectively whereas Nifty & BSE-Sensex is way below its recent bottoms, therefore it is showing better strength in comparison with the aforesaid indices. So if it hold these bottoms then temporary short bottom may already be in place but if it breaks these bottoms then possibly it could make short bottom in the range of 17502—17300. The upper range for Bank Index seems to be capped at 18470—18600---18740 for now.

In view of the above, it is suggested that after opening of the market watch the index for some-time and if it hold the bottom of 17738.90& 17719.35 then long call can be tried with a stop loss of below 17680 for an expected short pull back but if it breaks 17719.35 mark and sustain then short call can be tried with a stop loss of above 17750 for a target of 17520. Please note that since the trend is down therefore, I would personally prefer to avoid long calls instead I would look for opportunity to try sell call.

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. The aggressive can go for both long and short trade 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.