CNX-NIFTY--A TECHNICAL VIEW--29-10-2015

CNX-NIFTY

Closed at 8171.20 on 28-10-15.

Support:- 8088.60/8065/8055/ 7997/7960/7940/ 7840/7759/ 7723.

Resistance:- 8195.65/8269/8272.80/8282.70/8315.40/8321.75/8337.95/8359.75/8489.55/8504.95/8530.60/8561.35/8626.95/8654.75.

It opened with a down gap at 8188.90 and made a high of 8209.10 and then steadily moved down and made a low of 8131.80 before closing the day at 8171.20. It violated its last long term moving average support point of 8138.11(it changes every day) intra- day but managed to bounce back but closed below its most critical bottom of 8195.65 which is a bad sign and indicates weakness. You would recall that I wrote about it showing sign of fatigue and suggested to avoid long trade below 8285 instead suggested to try short call below 8250& 8195(see my post for 23^rd & 27^th Oct-2015)so restlessness is showing up now in it but even then technically  it is better placed in comparison with Bank Nifty because it is still holding up its  last long term moving average support point of 8138.11(it changes every day),it recent major bottom of 8088.60 and the Head & Shoulder pattern neckline range of 8020—7980 therefore it is still not that bad technically as yet. Although it gave first sign of crack by closing below it critical bottom of 8195.65 but it will exhibit potential weakness if it closes below 8138 & 8088 and sustain and finally it will break down below 7980 level. Please note that looking at last two days price movement and negative divergence on RSI it is likely to break 8138 & 8088 mark in coming days and then may head for further fall also, therefore for safe trader it is suggested to avoid long call now but since it is holding onto three key points now therefore aggressive trader can try long call on  dip but not below 8138 with a stop loss of below 8050, it could be a risky trade mind you. Short call can be tried if it consistently trades below 8195.65 with a stop loss of above 8240 on 29-10-2015.

 

Remark:-The short and intermediate trend is looking up. Since it has closed below it critical bottom of 8195.65 today, therefore it is suggested to avoid long call now till it closes above 8195.65 and sustain it for at least 2-3 days. So long call for safe traders is ruled out for tomorrow 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.