CNX-NIFTY--A TECHNICAL VIEW--9-11-2015

CNX-NIFTY

Closed at 7954.30 on 6-11-15.(Open-7956.55/High-8002.65/Low-7926.15)

Support:-7940/ 7930/7840/7759/ 7723/7691.20/7678/7667/7539.50/7422.15/7295.

Resistance:-7960/7997/8055/8065/8088.60/8091.20/8116.10/8195.65/8269/8272.80/8282.70/8315.40/8321.75/8336.30/8337.95.

It ended this week on a very weak note and closed near the low which is a bad sign and it is showing gross weakness on the technical chart. It could witness huge volatility and wild swings both ways on 9-11-2015 because of the outcome of Bihar election results, therefore it is suggested to watch the market for some time and initiate the trade only when it stabilizes. Since the trend is down and other technical parameters indicates that it could break 7795 level in coming days and may head further lower, therefore it is advised to avoid long call now and try it only if it closes reasonably above 8090 and sustain, please note that it will gain some strength only if it closes above 8130(it changes every day) and then above 8195.65 mark and sustain, therefore it would be relatively safe to try long call above 8130,however aggressive trader can try long call now but not below 7930 with a stop loss of below 7920 this could be a risky trade which may be kept in mind. Please also note that if it sustains below 7930 then long call should be avoided for the entire week starting from 9-11-2015 and for the month of November-2015 also till it bounces back again above this mark and sustain. It is therefore suggested to initiate short call if it consistently trade below 7930 with a stop loss of above 7970. The bias is down.

You would recall that it had Head & Shoulder pattern on the weekly chart (see my post for 28-9-15) and its neckline at present is at 8090(it changes every week). After staying above this neckline for quite sometime it has broken it again decisively and this is a bad sign because if this pattern comes into play then it could drag it down to its target range of 7100-6900(maximum). Therefore until and unless it closes reasonably above 8090 mark and sustain initiating long call would not be a good idea. 

Remark:-The long term trend is down and the short term trend has also turned down therefore long trade is completely ruled out till it closes above 8130(it changes every day) and sustain. It would be better to look for opportunity to sell on the rise at proper points now or try short trade as suggested above. Looking at price behavior for last few days’ short trade seems safer option.  

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.