NIFTY---A TECHNICAL VIEW---7-5-2015

CNX NIFTY

CLOSED AT 8097 ON 6-5-2015.

SUPPORT: - 8065.45/7961.15 /7841 / 7723 / 7540.10.

RESISTANCE: -8144.75 / 8147.95 / 8160 / 8180 / 8236.65 / 8269.15 / 8272.80 / 8282.70 / 8355.65 / 8364.75 / 8445.60 / 8470.50 / 8504.95 / 8612 / 8626.95.

Nifty opened on a flat to negative note at 8316.80 and made a high of 8331.95 and then in just 40 minutes of trade it plunged down by 100 points and thereafter it went down relentlessly throughout the day and made a low of 8083 before closing the day near the low at 8097. It lost 227.80 points today. As expected it broke the last month low of 8144.75 effortlessly (see my last post-4-5-2015). Since today’s fall was colossal and there was a sheer panic like situation therefore it seems that a temporary short bottom may be in sight in a day or two in the range of 8050—7960 of course if it holds this range, because if it does not hold then the next potential support would be in the the range of 7723—7540. The upper range for nifty seems to be capped at 8283—8360---8510 for now.

The short and medium term trend is down and long term trend is severely threatened and if it consistently remains below 8150 and does not go beyond  8283 & 8510 mark in coming days then it could see bear phase for few months and then it will drift lower in coming months and may go down to unbelievable  levels. As of now it is clearly a sell on the rise market. I would therefore personally prefer to avoid long call completely till it is visible that the on-going fall is arrested for good instead I would try short call on the rise at appropriate levels but would avoid short call above 8145 and then above 8283.  However  the aggressive day trader can   try long call within the range of 8050—7960 with a stop loss of below 7940 or above 8145 with a stop loss of below 8125.

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 is threatened and in real danger, since it is in downtrend therefore it is suggested to avoid long call now instead try short call on the rise. However the aggressive trader can try both short and long 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.