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

CNX-NIFTY

Closed at 7485.35 on 4-3-2016 (Open-7505.40/High-7505.90/Low-7444.10)

Support:-7422/7350.30/7295/7252.40/7241.50/7208.65/7204.65/7118.85/6960.65/ /6869/6825/6638.55/6432.70/6357.10/6338.50/6300/6275/6129.

Resistance:-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 today as perceived (see my post for 4-3-2016) and gave very short intra-day correction but did not correct as expected and on the closing basis instead closed with a small gain of 9.75 points. Although it is showing extremely good strength but the vertical rise without correction on the closing basis is concerning, so with each straight  rising day the vulnerability for down correction is increasing and as it is said in technical parlance that vertical rise may have vertical fall, therefore it is advised to be extra careful in long trade.

Please note that it is moving up unabated without making higher bottoms on the charts and the recent bottom on the bar chart and line chart are way below at 6825.80 and 6987.05 respectively and it cannot continue to move up like this, furthermore two unfilled gaps are still there, so in view of the above the threat of giving down   correction is always on. 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 I once again caution to be extra vigilant and alert in long trade.

The short term technical setup is o.k., so the long call can be tried above 7486 and then fresh position can be added if it moves and maintain above 7513 but with caution. It is important to mention here that one of its most critical point is at 7539.50 for the year 2016 and it is within the close proximity now, 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 7512.50/7539.50/7551/7600.45 and most importantly from the down trend line which is placed at 7625(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.     

For 8-3-2016 long call can be tried above 7486 and then add on position if it moves and sustain above 7513 and 7539.50 for a target of 7513/7539.50/7551/7600—7625/ 7667. The alert point for long trade is at 7417 and the authentic stop loss   would be below 7365. 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 650 points rise in last four days long call should be handled with extreme caution and care because correction may set in anytime.     

  Remark:-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.