CNX-NIFTY--- TECHNICAL VIEW---2-9-2015

CNX-NIFTY

Closed at 7785.85 on 1-9-2015

As expected it broke down 7940 mark, the lower band of the range and went down sharply and took support near one of earlier important bottom of 7723. It made a low of 7746.50 for the day and closed slightly above the low at 7785.85. It is exhibiting gross weakness on the technical chart and indicate further fall ahead and the recent bottom of 7667.25 it made on 25-8-15 is likely to breached in coming days, however in between short rallies cannot be ruled out. Since the trend is down and it is clearly sell on the rise market as of now, therefore it is suggested to avoid long call till it gives reasonable indication of a firm bottom formation.

It is important to mention here that there is a clearly visible Head & Shoulder pattern on the weekly chart and today it has broken its neckline decisively which was in the range of 7962-- 7940,although today was not the weekend but if it manages to close below 7940 on the weekend then the pattern could come into play and if it does then it can create havoc in coming weeks ,because the downside target of this pattern is in the range of 6900--6780 and moving up 7940--7962 range will pose a very stiff resistance to cross, other important support and resistance point are mentioned here under.

Support:-7723/7667/7650/7540/7422/7350.

Resistance:-7940/7962/8010/8065/8092.

Remark:- It is running below all its long term moving averages for number of days ,therefore it has severely threatened the long term uptrend and if this down move continues for some more days the uptrend may be over. Therefore for me long trade is completely ruled out for now instead I would try sell- call on the rise at appropriate points with proper stop losses.

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.