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

CNX-NIFTY

Closed at 7222.30 on 1-3-2016 (Open-7038.25/High-7235.50/Low-7035.10)

Support:-7208.65/7204.65/7118.85/6960.65/ /6869/6825/6638.55/6432.70/6357.10/6338.50/6300/6275/6129.

Resistance:- 7241.50/ 7252.40/7295/7350.30/7422/7512.55/7539.50/ 7551.05/7563.55/7589.50/7600.45/7667/7678/7691.20/7714.15/7723.85/7840/7863/7938.45/7940/7946.35/

It opened on a hugely positive note and then steadily moved up throughout the day and ended the day with a whopping gain of 235.25 points. It has crossed its all short term moving averages convincingly today but it is very near to its tough resistance range of 7241.50---7252.40---7295. (See my earlier post) 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 nifty’s 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 the bear market territory, so this rise could be a sharp bear rally only. Furthermore it is very close to its tough resistance zone, therefore it is advised that long call should only be attempted once it moves above the bear market territory threshold point of 7295 and sustain and not now because if it fails to cross this mark or after crossing fails to sustain  then it could trigger sharp fall.

  

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 zone ahead therefore it would be safe to try long call only if it moves and sustain above 7295 level but aggressive trader can try long call on dip but not below 7180 with a stop loss of below 8140 or if it moves and sustain above 7253 with a stop loss of below 7200. 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 7253 and then near 7295 with a stop loss of above 7320.    

Remark:-It is in bear trend now. 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 7295 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.