CNX-BANK NIFTY--A TECHNICAL UPDATE---4-1-2016

CNX--BANK NIFTY

Closed at 17039.25 on 1-1-2016(Open-16932.50/High-17067.45/Low-16824.05)

Support:-16932.50/16922.05/16824.05/16741/16670.55/16648.30/ 16188.05/15762.20/15301.65/15130.35.

Resistance:-17067.45/ 17174.70/17246.55/17499/17502.45/17569/17652.35/17827/18029.05.

After showing sign of exhaustion it bounced back today and crossed its recent high of 17045.55 made on 29-12-2015 during the day and closed above it recent top of 16991.45 on the line chart which is good but it is still lagging behind Nifty. However it is making higher tops and bottoms on the line chart and the recent bottom is at 16917.90, it is running above its all short term moving averages now. Furthermore its alert or benchmark point for long trade for the entire year of 2016 are 16932.50 & 16922.05 and exit point is below 16880 and it is above these points now which is a good sign. But moving up it will face series of resistance from its medium term moving averages and various earlier bottoms but the first major resistance would be at 17189 which is 76.40% retracement point derived from its recent top & bottom of 17498.35 and 16188.05 and if it manages to cross this mark and sustain then it could possibly make an attempt to cross or test the top of 17498.35. The bias is on the upside as long as it holds 16880 levels on the closing basis. But in view of series of resistance ahead it seems that the up journey may not be smooth. I once again repeat that long call should be avoided below the above mentioned alert point of 16932.50 & 16922.05 in the year 2016 and long trade should be exited below 16880 for sure.

For 4-1-2016 long trade can be tried on the dip but not below 16922.05 with a stop loss of below 16880,  one can add position  if it moves and sustain above 17070 with a stop loss of below 17000 for added position.

 Remark:-The long term trend is down. In wake of good bounce back today long call can be tried as suggested above, but in view of the tough resistance range ahead long trade should be handled with extreme caution and care. It is advised to avoid long call below the alert points 16932.50 & 16922.05 for sure in the year -2016.

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.