CNX-NIFTY- A TECHNICAL VIEW--6-10-2015

CNX-NIFTY

Closed at 8119.30 on 5-10-15.

Support:-- 8091.80/8065/8055/ /7997/7960/7940/ 7840/7759/ 7723

Resistance:-8195/8225/8269/8272.80/8282.70.

It opened on a tremendously firm note at 8005.10 and the open was the low also thereafter it never looked back and steadily moved up and made a high of 8128.90 before closing the day near the high at 8119.30. It gave a huge up side breakout from the neckline of the inverse Head & Shoulder pattern on the daily bar chart and moved above the Head & Shoulder pattern neckline on the weekly bar chart also. The neckline for both the pattern was in the range of 8040—8065( see my post for 28-9-2015). This gives a very positive indication for the up move to continue provided it hold this range of 8040—8065 and then 8000 mark for the next 3-4 days, if it does hold then it can give good rise from here. Moving up it will face hurdle at 8135, 8160(it changes every day) & 8195.65 once it crosses these levels and sustain it will show further strength. Today’s move indicated to adopt buy on dip strategy but since it was  the first day of up-side  breakout ,so it has to be seen whether it will sustain it or not therefore long traders should not be extra ordinarily enthusiastic. It seems that it may sustain this breakout and up move may continue, therefore till it holds 8040 and 8000 mark short call should be avoided and only long call can be tried now or buy on decline. 

TRADING STRATEGY FOR-6-10-15

1.Long call can be tried  now or on the dip but not below 8005 ,the authentic stop loss for long trade would be slightly wider below 7940 ,one can place shorter stop loss below 7990 also. 

2. Short call can only be tried if it sustains below 7940 with a stop loss of above 8000. Hopefully trader won’t get chance of this trade tomorrow.

Remark:-The long term trend is still down but short and intermediate trend is looking up .Today’s up- side breakout was huge  and clearly indicates to adopt buy on dip strategy till 8040 and 8000 levels are taken out decisively. Short trade should be avoided for now and can only be tried below 7940.   

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.