CNX-NIFTY--A TECHNICAL VIEW--11-2-2016

CNX-NIFTY

Closed at 7215.70 on 10-2-2016(Open-7264.30/High-7271.85/Low-7177.75)

Support:-7118.45/6868.85/6638.55.

Resistance:-7241.50/7295/7350.30/7422/7539.50/ 7551.05/7563.55/7589.50/7600.45/7667/7678/7691.20/7714.15/7723.85/7840/7863/7938.45/7940/7946.35/7960/7979.30/7997/8055/ 8065/8091.20/8116.10/8244.

Today it opened with a down gap again and went down further and as expected broke the bottom of 7241.50 on the bar chart and closed the day well below its threshold level of 7295 for the bear market territory and also below its recent bottom of 7241.50 on the bar chart with a loss of 82.50 points. It is showing gross weakness on the chart, therefore long call should not be attempted till it moves and sustain above 7295 or it gives visible indication of some strength at the lower level and the possible points could be 7118/7020/ 6825, so watch out. The bias is on the downside therefore sell on the rise strategy should be followed now but be alert in short call if it moves and sustain above 7295. Although the trend is down but in between short relief rally cannot be ruled out but it is advised not to take advantage of these rallies as it can trap you.

It is important to note that today was the second day of gap down open and the gap still exist, so there is two down gaps in a row and if tomorrow it opens with a down gap i.e. below 7177.75 and go down further then one should be alert in short position and it is suggested to exit short trades then , because generally after 3^rd gap it makes an effort to fill the gaps and if it does then it could come up to 7364-7400 levels. But in any case please be alert in short trade above 7241.50 and exit trade if it move and sustain above 7295.  

For11-2-2016 can sell now or on the rise but not above 7241.50 with a stop loss of above 7295 or can sell below 7190 with a stop loss of above 7245 for a target of 7118—7095.

Remark:-The long term trend is still down. Since it has entered the bear market territory, therefore don’t think of long call till it moves and sustain above 7295 at least. Short call still seems to be good option but 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.