NIFTY--A TECHNICAL VIEW--FOR THE WEEK STARTING FROM--4-5-2015

CNX NIFTY

CLOSED  AT 8181.50 ON 30-4-2015.

Range for the week ended on 30-4-2015 was:-8334.45-----8144.75.

Range for the month of April-15 ended on 30-4-2015 was:-8844.80---8144.75.

SUPPORT: - 8180 / 8160 / 8147.95 / 8065.45/7961.15 /7841 / 7723 / 7540.10.

RESISTANCE: - 8236.65 / 8269.15 / 8272.80 / 8282.70 / 8364.75 / 8445.60 / 8470.50 / 8504.95 / 8612 / 8626.95 / 8669 / 8788.70 / 8794.48 / 8844.80 / 8849.75 / 8913.45 / 8996.60 / 9119.20.

  

Nifty closed the month of April-2015 and weekend around the lower band of the range which shows gross weakness in it and it indicates that the bottom is still not in place . However the next week starting from 4-5-2015 is the beginning of May-2015 series therefore it may behave in a steady manner and may give short up move also for few days  but It seems that the recent low of 8144.75 it made today will be broken effortlessly in coming days. Going down it will find good support in the range of 8141-----8050----7960 and if it violates this range then the next range is 7862---7723---7540, and moving up it will find very tough resistance in the range of 8283----8510----8627.

TECHNICAL OBSERVATION

1.Below all its short , medium and some of the long term moving averages furthermore  short term moving averages  have started giving negative crossovers ,it is  more bearish sign. To convert it into a positive crossover it has to sharply move above 8430 and sustain for few days.

2. The long term moving averages range is between 8510---8141(it changes every day with price movement) for 4-5-2015.It took support around the lower band of the average today and closed above it but still not comfortably above it. If it breaks the 8141 mark and consistently starts trading below it then downside move will accelerate.

3. MACD is in sell mode on daily and weekly chart and on monthly chart it has made a top and turned down and approaching trigger line, so watch, it could give sell signal in the month of May-15 ,if nifty moves with a downward bias during the month and that could be devastating.

4.RSI on daily chart is showing some positive divergence, so it may give a short up move but on weekly and monthly chart it has given huge negative divergence and if it sustain then it could give huge down move in coming weeks or months , so be alert.

In view of the above technical facts it looks highly bearish. Therefore, I am of the opinion that it has still not made a firm bottom but it may give a short up move from here. Since the trend is down, I would prefer not to initiate long trade personally but would look for opportunity to sell on the rise at appropriate levels, however aggressive trader can try long call above 8190 or near 8141 with a stop loss of below 8165 & 8125 respectively. Avoid long call below 8141 for sure for the entire month of May-2015 but it can be tried near the strong support area in the rage of 8050—7960 with a stop loss of below 7950. Since short and medium term trend is down and long term up trend is threatened, I would opt for sell call on the rise at proper levels and below 8141 for sure with a stop loss of above 8182. Avoid fresh sell call if it closes above 8290 and initiate only if it break 8269 level again.

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 severely threatened and if it moves below 8141 and sustain then long term uptrend would be in real danger. Please note that to keep the uptrend going it has to bounce back above 8283 / 8510 & 8626.95 and sustain. Traders can try both long and short trade depending on the price movement as suggested above. The bias is on the downside.

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.