CNX-BANK NIFTY--A TECHNICAL VIEW--25-1-2016

CNX--BANK NIFTY

Closed at 15497.55 on 22-1-2016(Open-15343.15/High-15575.65/Low-15274.90)

Support:-15130.35/14858.50/14754.65/14709.10/14338.65/13414.30.

Resistance:- 15626.90/15725.80/15742.05/15762.20/16188.05/16192/16309.70/16587.25/16648.30/16670.55/16741/16824.05/16922.05/16932.50/17067.45/ 17174.70/17246.55/17499/17502.45/17569/17652.35/17827/18029.05.

As perceived it seems that it has made bottom at 14754.65 for now but how long this is going to be sustained has to be seen (see my post for 19-1-2016). As anticipated it gave rise today but this stupendous gain of 396.35 points was not expected (see my post for 22-1-16). Although overall it is very weak technically but showing some sign of improvement as it has crossed certain short term moving averages furthermore looking at the strong positive divergence in the RSI on the daily chart it seems that this rise may continue for few days provided it holds 15250 on the closing basis. Moving up it will face resistance from the top of 15871.85/16142.65 & 17039.25 on the line chart, from the fibonacci retracement point’s at 15638/15910/16184/16522 and most importantly from its one of the crucial point at 15762.20 for the year 2016. The range for the week is between 15575.65---14754.65 and break on either side will decide the direction for the week starting from 25-1-2016. Since it is close to the upper band of the range and in light strong positive divergence in the RSI it is likely to give upside break and it may cross the tops of 15871.85 & 16142.65 on the line chart in coming days. Please note that it will only get stable if it moves and sustains above 15762.20.

It is important to mention here that it is in down trend and this up move of today is a pullback rally as of now and how it will culminate has to be seen but as you are already aware that pullback rallies are treacherous in nature and may end abruptly also so be alert and careful and handle long call with extreme caution and care.

For 25-1-2016 long call can be tried now or on dip but not below 15290 with a stop loss of below 15250, can add on position if it moves and sustain above 15580 with a stop loss of below 15470 for added long position for a target of 15762.20/15871.65 & 16142.65. Please note that once it crosses 15762.20 marks and sustain then elevate your stop loss below 15700.

Remark:-The long term trend is still down. In view of the robust up move today and strong positive divergence on RSI, long call can be tried as suggested above, but since it is a pullback rally as of now long trader should be extra vigilant in their trade position.   

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.