CNX-BANK NIFTY--A TECHNICAL VIEW--15-2-2016

CNX--BANK NIFTY

Closed at 13971.50 on 12-2-2016(Open-14088.60/High-14154.55/Low-13810.60)

Support:-13810/13414.30/13303.60/13150/12738.60/12514.75/12430.85.

Resistance:- 14338.65/14709.10/14754.65/14858.50/15130.35/15136.85/15162.05/15206.30/15300/15522.40/15547.75/15626.90/15682.65/15725.80/15742.05/15762.20/16188.05/16192/16309.70/16587.25/16648.30/16670.55/16741/16824.05/16922.05/16932.50/17067.45/

It opened on a positive note and went up further but could not hold on at the higher level and steadily moved down and closed below the physiological level of 14000 with a loss of 57.05 points. In last 5 days it lost more than 1550 points intra-day and more than 1070 on the closing basis which speaks of its inherent weakness.

Please note that after yesterdays panic, today it did not behave the way it should have  for making a possible short bottom (see my post for 12-2-2016). Therefore it seems that an expected short bottom after such decline is still not in place and today’s low of 13810 is likely to be taken out in coming days/ weeks. However it will act as a valid support point for the entire week starting from 15-2-2016, therefore one should be alert in short call above this mark. Furthermore it has very strong support in the range of 13750—13690—13650—13520—13414--13303, so it may make short bottom around these range. But please note that sustained break below 13414.30 &13303.60 can drag it down to much lower levels. 

It is extremely weak on the chart but since it has been falling for last 5 days so it may take a breather here and may give a short relief rally, if it does and crosses 14260 mark and sustain then  up move may extend for few days else the down move may continue again , moving up it would face resistance at 14406/14590/14775 and most importantly from its long term rising trend line on the daily chart which is at 14460(it moves up every day)for 15-2-2016 and on the monthly chart at 14565--610 and possibly the expected up move can exhaust at any of these points so be watchful and alert if it happens. But since the trend is down, so it is suggested and would be safe to avoid long call for taking advantage of in between up move and it should be avoided for sure below 13810 for the entire coming week and sell on the rise strategy should be followed. Please note that long call can only be tried if it shows some visible strength

For 15-2-2016 can sell below 13950 with a stop loss of above 14010 for a target of 13810 and sell below 13810 for sure with a stop loss of above 13870 for a target of 13690/13650/13520. Since it has been falling for last five days, so it may take a breather here and may give a short up move but as of now there is no sign of it, however the aggressive and contrarian trader can try long call also if it moves and sustain above 14000 with a stop loss of below 13950 for a target of 14155 and then 14242--14289, but be vigilant and extra careful in long trade, it could be a risky trade mind you.   

Remark:-It is in long term bear trend.  It seems that a short bottom is still not in place therefore it is better to avoid long call till it shows some strength. Since it is giving mixed signal now therefore both long and short call can be tried as suggested above depending on the price movement of the day and 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.