CNX-NIFTY--A TECHNICAL VIEW--1-10-2015

CNX-NIFTY

Closed at 7948.90 on 30-9-15.

Support:--7940/ 7840/7759/ 7723 / 7678.50/7667.25/7539.50/7422.

Resistance:-7970/7997/8055/8065/ 8091.80/8195.

It opened on a firm note at 7924.75 and then made a low of 7874.50 and thereafter steadily moved up and made a high of 7957.70 before closing the day near the high at 7948.90. It gave a robust up move today and it out played Bank Nifty completely. It showed good strength and short term technical parameters have improved even then it has to be seen that whether this momentum will continue or not because the trend is still down. It is still within its broad range of 7660—8060(see my post of 28-9-2015) and break out on either side would decide which way it will move, if it moves above 8060 mark it will show some strength and it will show real strength if it sustains above 8137 level(it changes every day).

For 1-10-2015 its short term trend line would be at 7816, Its short term moving average range is between 7894--7814(it changes every day), It is closer to the upper band of its broad range of 7660-8060, after making lower top & bottom on the line chart  it has decisively crossed the recent top of 7868.50 which is good sign. Therefore short term parameters are encouraging but not to forget that the corrective up rallies shows all the promise but can exhaust abruptly also, so one has to be very careful and cautious in the long trade. In view of the above technical observation the following trading strategy is suggested.

TRADING STRATEGY

1.Long call can be tried above 7970  with a stop loss of below 7920.

2.Can try buy call near 7894 with a stop loss of below 7848.It could be a risky trade.

3. Short call can be tried below 7860 with a stop loss of above 7900

4. if it moves up it is going to face huge resistance in the range of 8040-8065 so try sell call here but not above 8065 with a stop loss of above 8110.

Remark:-The long term trend is still down. Today’s move was strong and steady and suggest buying but moving forward it will face huge resistance in the range of 7940—7970—8022--8065 and the fear of rally exhaustion is also there, therefore specially long trade should be handled with extreme caution  and care. Traders can initiate trades as suggested above.                                                                                            

Please 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.

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.