CNX-NIFTY-A TECHNICAL VIEW-9-2-2016

CNX-NIFTY

Closed at 7387.25 on 8-2-2016(Open-7489.70/High-7512.55/Low-7463.25)

Support:-7350.30/7295/7241.50/7118.45/6868.85/6638.55.

Resistance:-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.

An important annual event of Budget-2016-17 is ahead therefore lot of action and volatility is expected in the market, so one should be cautious in trade till the event is over.

It opened flat today and desperately tried to move up but could not and went down sharply in last hour of trade and closed with a loss of 101.85 points. Short term technical setup was not that encouraging and looks terribly weak after today’s severe down move. The only positive point now is that it is still holding it recent higher bottom of 7350.30 on the bar chart and bottom of 7361.80 on the line chart, so if it holds the aforesaid bottom range it could still rally. The negative points are that it fell well below its short term moving average range which is between-7436--7487 (it changes every day) for 9-2-2016 , it has broken its short rising trend line today which was at 7393 and it is at 7410 for 9-2-2016  and it is far below its short term down trend line which is at 7505 for 9-2-2016. The overall bias is down now ,therefore long call should only be tried if it moves and sustain above 7539.50 which is one of its most crucial benchmark point and is valid for the entire year of 2016.

It is important to mention here that its threshold point for entering the bear market is at 7295 and it is not very far away from here. Please note that sustained break below this level could drag it down faster and to much lower levels. So this would be the benchmark point for initiating or exiting both ways trade.

For 9-2-2016 In view of the above fresh short call can safely be tried if it breaks the bottom of 7361.80 and then below 7350 for sure with a stop loss of above 7410 or on the rise but not above 7490 with a stop loss of above 7515 similarly aggressive trader can try long call also provided it move above its recent top of 7489.10 on the line chart and sustain for some time with a stop loss of below 7435. It is suggested and would be safe to try long call if it moves and sustains above 7539.50.

Remark:-The long term trend is still down. After previous days good rise it had a breakdown today, therefore long call is ruled out for now and should only be attempted if it moves and sustain above 7539.50 till then try short call on the rise as suggested above or below 7350 for sure.

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.