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

CNX-NIFTY

Closed at 7963.20 on 1-1-2016(Open-7938.45/High-7972.55/Low-7909.80)

Support:-7960/ 7946.35/7940/7938.457889.85/7852.90/7840/7817/7723.85/7714.15/7691.20/7678/7667/7575.30/7539.50/7422/7311/7295/7119

Resistance:-7979.30/7997/8055/ 8065/8091.20/8116.10/8244.

The up momentum is still on and its short term technical setup is good, it is also making higher tops and bottoms on the line chart and its recent bottom is at 7896.25,its short double bottom on the bar chart is at 7889 and it is running above its all short term moving averages .Furthermore its alert or benchmark point for long trade for the entire year of 2016 are 7946.35 & 7938.45 and exit point is below 7889 and it is above these points now which is a good sign. But it is important to note that it is very near to its previous top of 7979.30 which it made on 2-12-2015, furthermore moving up  it will face  very stiff resistance in the range of 7979.30—8117 from its various tops and bottoms ,some long term moving averages and most importantly from the neckline of the Head & Shoulder pattern on the weekly chart which is between 8090—8100( it moves up every week) for this week, so the up journey may not be smooth but the bias is on the upside as long as it hold 7889 level on the closing basis. I once again repeat that long call should be avoided below the above mentioned alert point of 7946.35 & 7938.45 in the year 2016 and long trade should be exited below 7889 for sure.

 It is important to mention here that it will encounter huge resistance from its long term moving averages which are in the range of 8019—8250(it changes) for now and it will regain smooth up momentum only above this range which may be kept in mind.

For 4-1-2016 long trade can be tried on the dip but not below 7938 with a stop loss of below 7889, or try if it moves and sustain above 7980 with a stop loss of below 7930 for added position. Please note that if it fails to cross and sustain its previous top of 7979.30 it can slide from here, so it would be safe to try long call if it moves and sustain above 7980.

Remark:-The long term trend is down. Since its technical setup is looking good on the daily chart 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 7946.35 & 7938.45 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.