CNX-NIFTY--A TECHNICAL VIEW--19-2-2016

CNX-NIFTY

Closed at 7191.75 on 18-2-2016(Open-7177.40/High-7215.10/Low-7127.85.)

Support:- 7118.45/ 7057.35/7048.25/7021/6980.95/ 6976.35/6868.85/6638.55/6432.70/6357.10/6338.50/6300/6275/6129.

Resistance:- 7241.50/7295/7350.30/7422/7512.55/7539.50/ 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.

It opened with a huge up gap and went further higher and thereafter drifted down to fill the gap and it almost covered the gap and then moved up again and closed the day with a gain of 83.30 points and near the high of the day. Since it has closed above its previous top of 7162.95 on the line chart (see my post for 18-2-2016) and it has already made higher bottom of 7048.25 and now higher top is in the making, therefore as long as it holds 7162.95 and then 7048.25 on the closing basis this up move may continue for few days. But be alert in long trade if it consistently starts trading below 7162.95 during the day and exit long trade below 7100. Moving up it will face resistance at 7215/7241.50/7267/7295/ 7310/7360—7400 and possibly the on-going up move may exhaust at any of these points so be watchful and alert. Since it is in down trend and the on-going up move is a bear rally only as of now so the above points could also be used as sell point provided weakness is visible in the prices during the day.    

Please note that I would once again caution safe trader that not to take advantage of the in between up rallies in bear market, as these rallies are treacherous in nature and can trap you unaware at higher levels. However aggressive intra-day trader can try long call if they wish too as mentioned below.  The long trade can safely be attempted only if it comes out of the bear territory mark of 7295 and sustain.

    

For 19-2-2016 aggressive trader can try long call now or near but not below 7162.95 with a stop loss of below 7100 for a target of 7215/7241.50/7267/7295/7310-7360. Similarly these points can also be used as sell points provided price show weakness during the day and with the proper stop losses or sell call can be tried if it maintains below 7100 with a stop loss of above 7165 and add on position if it maintains below 7048 with a stop loss of above 7114 for a target of 6960/6868/6825. Please note that sell call should surely be attempted in the range 7275—7295 with a stop loss of above 7325. I once again repeat that since it is pullback rally therefore long trade should be handled with extreme caution and care.

 Remark:-It is in long term bear trend now. In view of the higher top & bottom on the line chart, it seems that the on-going up move may continue for few days, therefore long call can be tried as suggested above. But if price moves otherwise short call should also be tried and must be attempted in the range of 7275-7295.  Please note that taking advantage of the pullback rally could be risky, so be alert and watchful in long trade.

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.