CNX-BANK NIFTY--A TECHNICAL VIEW--23-10-2015

CNX--BANK NIFTY

Closed at 17710.55 on 21-10-15.

Support:-17652.35/17502.45/17434.05/17401.20.17246/17174/16670/16648.

Resistance:-17719/17738/17821/18035/18174.20/18411/18586/18728.20/18836.65/18832/18896.45/18922.60/18980.65/19100.55/19229.05.

After the decisive breakout from the neckline on 16-10-2015 it should have reasonably moved up from the neckline in following days. But in fact it kept languishing near the neckline for next two days and fell below it today which shows weakness and indicates that it was a weak breakout and now this rally is showing sign of fatigue. Please note that the neckline now stands at 17805(it changes) and the short term rising trend line at 17620(it changes every day), It is therefore suggested to avoid long call now  and try it only if it gives up-side breakout from the neckline  again and sustain it for 3-4 days. Moving down it has critical support point at 17542(it changes) and 17401 and break and close below these levels will mark the end of this on -going up move and indicative of a possible start of a new down move. Seeing today’s movement things are not looking great therefore long call should be avoided for sure till clarity on its strength emerges.  

TRADING STRATEGY FOR-23-10-15

1.Avoid long call for now but aggressive trader can try it near 17542 but not below this with a stop loss of close below 17400.It could be a risky trade.

2. Short call can be tried if it consistently trades below 17805 with a stop loss of above 17910.It could be a risky trade but worth trying.

3.Aggressive trader can try short call if it consistently  trades below 17620 with a stop loss of above 17690 and add on position below 17542 and 17400 with a stop loss of above 17630 and 17550 respectively.

Remark:-The short and intermediate trend is looking up. Since it failed to hold the breakout level and fallen below its neckline and also showing sign of fatigue, therefore long call is ruled out for now till it gives decisive break out again and sustain, instead short call can be tried 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.