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

CNX-NIFTY

Closed at 7422.45 on 22-1-2016(Open-7355.70/High-7433.40/Low-7327.60)

Support:-7422/7295/7241.50/7118.45/6868.85/6638.55.

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.

As perceived it seems that it has made bottom at 7241.50 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 145.65 points was not expected (see my post for 22-1-16). Although overall it is very weak technically but 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 7350 on the closing basis. Moving up it will face resistance from the top of 7435.10/ 4562.40 & 7601.35 on the line chart, from the fibonacci retracement points at 7521/7607/7693/7800 and most importantly from its one of the  crucial point at 7539.50 for the year 2016. The range for the week is between 7470.90---7241.50 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 may cross the tops of 7562.40 & 7601.35 on the line chart in coming days. Please note that it will only get stable if it moves and sustains above 7539.50.

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 above 7435.10 with a stop loss of below 7390, can add on position if it moves and sustain above 7471 with a stop loss of below 7420 for added long position for a target of 7540—7570 and then 7610. Please note that once it crosses 7539.50 and sustain then elevate your stop loss below 7500.

  

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 if it moves above 7435.10 with suggested stop loss, 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.