CNX--BANK NIFTY- A TECHNICAL VIEW FOR-- 8-3-2016

CNX--BANK NIFTY

Closed at 15339.20 on 4-3-2016(Open-15243.75/High-15451.75/Low-15005.50)

Support:-15130.35/14858.50/14754.65/14709.10/14602.25/14467.15/14338.65/13892.10/13810.60/13519.90/ 13407.25/13414.30/13303.60/13150/12738.60/12514.75/12430.85.

Resistance:- 15367.90/15565.50/15682.65/15762.20/16188.05/16192/16309.70/16587.25/16648.30/16670.55/16741/16824.05/16922.05/16932.50/17067.45.

It opened with a short up gap today but filled the gap during the day, but please note that the gap it created on2-3-2016 is still intact, furthermore it has risen by more than 2000 points straight in last six days and has left its recent bottoms on the charts far below which are  at 13555.70 and 13407.25 on the line and the bar chart respectively. Please note that it cannot keep on moving up vertically, it has to come down to make higher bottom even if it has to move up further, therefore with  each passing up day vulnerability for down correction is increasing and in technical parlance also it is said that the vertical rise may have a vertical fall too. The longer time it takes to correct the impact could be severe which may be kept in mind.  However looking at its strength now it could still move up further from here for few more days before it corrects, but the day correction sets in it could be sharp and severe.  Therefore it is advised to be extra vigilant in long trades.

The short term technical setup is o.k., so the long call can be tried above 15340 and then fresh position can be added if it moves and maintain above 15455 but with caution. It is important to mention here that one of its most critical point is at 15762.20 for the year 2016 and it not very far away from this, if it moves and sustain above this mark then it will show good strength  which may please be noted. Moving up it would face resistance at 15367.90/15451.75/15565.50/15682.65/15762.20 and most importantly from the down trend line which is placed at 16170(it decreases every day) for 8-3-2016, if it gives up side break from the down trend line and sustain then the rise can extend further. It is important to mention here that it is still in long term bear market territory and can only come out if it moves above 16725 mark, which may please be noted.    

For 8-3-2016 long call can be tried above 15340 and then above 15455 for a target of 15367.90/15451.75/15577/15682.65/15762.20   . The alert point for long trade is at 15170 and 15140 and the authentic stop loss   would be below 15000 .It is therefore suggested to use self defined stop losses with the help of support point mentioned above to manage the trade better. In view of more than 2000 points rise in six days long call should be handled with extreme caution because correction may set in anytime.    

  Remark:-It is in long term bear trend since 4-1-2016.    It is showing good strength but rising without any respite increases its vulnerability for down correction with each passing up day. But since its short term technical setup looks o.k. so possibly this up move may last for few more days before it corrects, therefore long call can still be tried as suggested above but very cautiously.  

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.