CNX-BANK NIFTY--A TECHNICAL VIEW--2-3-2016

CNX--BANK NIFTY

Closed at 14412.90 on 1-3-2016(Open-14064.80/High-14445.70/Low-14064.80)

Support:-14338.65/13892.10/13810.60/13519.90/ 13407.25/13414.30/13303.60/13150/12738.60/12514.75/12430.85.

Resistance:- 14467.15/14602.25/14709.10/14754.65/14858.50/15130.35/15136.85/15162.05/15206.30/15300/15522.40/15547.75/15626.90/15682.65/15725.80/15742.05/15762.20/16188.05/16192/16309.70/16587.25/16648.30/16670.55/16741/16824.05/16922.05/16932.50/17067.45.

It opened on a positive note and then steadily moved up throughout the day and ended the day with a whopping gain of 466.50 points. It has crossed its all short term moving averages convincingly today but it is still below its long term rising trend line which is at 14510(it changes every day) for 2-3-2016 and also below its recent  top of 14467.15 and 14602.25 and bottom of 14754—14761. Looking at today’s robust rise it seems that this move may continue for few days if it is a genuine rise but if it is a result of short covering then it may fizzle out tomorrow itself or a day after. In this context please note that today’s rally lacked volumes in its constituents stocks therefore it seems that the rise may be was due to short covering ,if it is so then it is not likely to last. However   in view of above observation it is advised not to be over enthusiastic for long trade looking at today’s rise and let it give 1-2 days time to establish that it was a genuine rise. It is important to mention here that it is still in long term bear market territory for a long time, so this rise could be a sharp bear rally only. Therefore it is advised that long call should only be attempted if it moves and sustain above 14602.25 and not now.

  

For 2-3-2016 watch the market for sometime before initiating any trade. Please note that Long call could be risky here because of tough resistance points ahead therefore it would be safe to try long call only if it moves and sustain above 14602.25 levels but aggressive trader can try long call above 14467.15 with a stop loss of below 14380. Since today’s rise lacked volumes this rise may not be sustainable therefore it would be worth trying short call if it does not move above 14467.15 for some time and then near 14602.25 with a stop loss of above 14680.   

Remark:-It is in long term bear trend since 4-1-2016. Since there is no clarity and confidence about today’s rise therefore both long and short call can be tried as suggested above and depending on the price movement. I would personally avoid long call below 14602.25 instead try short call if price pattern gives weak indication during the day. 

  

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.