CNX-NIFTY--A TECHNICAL VIEW-21-1-2016

CNX-NIFTY

Closed at 7309.30 on 20-1-2016(Open-7357/High-7470.90/Low-7241.50)

Support:-7295/ 7241.50/7118.45/6868.85/6638.55.

Resistance:- 7422/7425.80/7437.80/7463.65/7539.50/7551.05/7667/7678/7691.20/7714.15/7723.85/7840/7863/7938.45/7940/7946.35/7960/7979.30/7997/8055/ 8065/8091.20/8116.10/8244.

It is so weak technically that as perceived it could not hold yesterday’s gain even for a day and today opened with a down gap and in intra-day hammered it down by more than 190 points and closed with a loss of 125.80 points. It broke its most crucial point of 7295 during the day but managed to close just above it. Please note that this is the benchmark point and sustained break below this level can drag it down to 7118.45/6869—6825/6650, chance of which looks reasonably good because of today’s intra-day break of this level, but anyway short call should be avoided above this level for sure and can only be tried if it moves and sustain below 7295 with a stop loss of above 7340. Please note that if it maintains above this level it may give a relief rally which can possibly take it to 7539.50 levels. It will only get stable if it sustains above 7539.50 which may please be noted.

Since the overall technical position is very fluid it is suggested to avoid long call till it exhibits some visible strength at the lower levels or moves above 7539.40. Long call can also be tried successfully if it moves and sustain above 7435 with a stop loss of below 7400. However for those who want to   take advantage of in between short relief rallies can try long call if it maintains above 7295 with a stop loss of below 7240. Please note that long trade could be a risky proposition below 7539.50 which may be kept in mind.  

Remark:-The long term trend is down. It could not sustain yesterdays up move which speaks of terrible weakness. It also broke its most crucial point of 7295 intra-day but managed to hold. So both long and short trade can be tried as suggested above but one should be circumspect in long trade at least.  

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.