CNX-NIFTY- A Technical Update for- 18-1-2016

CNX-NIFTY

Closed at 7437.80 on 15-1-2016(Open-7561.65/High-7566.50/Low-7427.30)

Support:- 7425.80/7422/7295/7118.45/6868.85/6638.55.

Resistance:- 7539.50/7551.05/7667/7678/7691.20/7714.15/7723.85/7840/7863/7938.45/7940/7946.35/7960/7979.30/7997/8055/ 8065/8091.20/8116.10/8244.

It opened on a positive note and traded in a very short range for the major part of the day but in last 1- hour trade it fell down sharply and almost hit the low of 7425.80 it made on 13-1-2016. It closed near the low of the week with a loss of 99 points and most importantly well below its one of the most important level of 7539.50 valid for the entire year of 2016 for the 2^nd consecutive day which is a bad sign and indicates gross weakness in it. Technically it is already on a weak footing and today’s move suggest that the on –going fall may continue for few days before it takes a breather and moving down it will find support at 7295/7118.45/6868.85.  The range for the week starting from 18-1-2016 is between 7422—7539.50 and sustained breakout on either side will decide the direction of the market for the week. It is needless to mention here that the long term trend is down.

It is important to mention here that long call should be avoided for the entire year of 2016 if it remains below 7539.50 and below 7422 for the entire week starting from 18-1-2016. Please note that the copy book threshold level for it entering the bear market it at 7295, so sustained break below this mark can trigger big fall. Long call can be tried at lower levels only if visible sign of some kind of bottom formation emerges or else as stated above.

For 18-1-2016 it is suggested to try short call below 7422 with a stop loss of above 7460 or sell on the rise but not above 7539.50 with a stop loss of above 7570. Looking at the overall technical setup long trade is not recommended till it shows some strength at the lower levels or until and unless it moves and sustain above 7539.50 levels. It is advised to watch the market for some time before initiating trade.

Remark:-The long term trend is down. After two days of see saw movement it was a sort of breakdown today which showed weakness, therefore short call is recommended below 7422 or take trading calls as suggested above.

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.