CNX--BANK NIFTY- A TECHNICAL VIEW – 9-5-2016

CNX--BANK NIFTY

Closed at 16296.60 on 6-5-2016(Open-16264.45/High-16346.25/Low-16186.25)

Support: 16282.75/16205/16188/16141.65/16099.65/16080.55/16011/15958/15762.20/15682.65/15522/15440.25/15178.30/14989.40/14761/14754/14445/13810.6013407.25.

Resistance: 16349.70/16386/16526/16587.25/16648.30/16726/16750/16824.05/16922.05/16932.50 - 17067.45/17174.70/17246.55/17498.35/17502.45/17719/18029.05.

As expected in early trade it gave an impression that yesterday up move may fizzle out but later in the day it recovered and recouped the losses and closed with a small gain of 15.59 points.  Its technical  setup is weak but not that bad but it is  not good either as it is running below its short term and few long term moving averages but the good point is that it respected its strong support range of 16242---16071--15950 (it changes every day) and bounced back, furthermore its recent bottom of 16274.25 on the line chart is intact, so as long as it holds this bottom on closing basis, chances are that it may  move up further from here and if it does move up how long it will last has to be seen because moving up it will face very stiff resistance from its tops, bottoms and from short, medium and long term moving averages which are in the range of 16400---16530---16650--16800(it changes every day) and from its Fibonacci retracements points at 16386/16509/16608/16708/16830. Therefore it seems that the up journey may not be smooth and it can abruptly end also at any of these points, so be watchful and alert in long trade at least. In view of the above observation it is suggested to avoid short trade if it moves and sustain above 16297 but since the overall technical setup is slightly weak now therefore short trade can still be tried on the rise at strong resistance points with proper stop losses or can be tried if it moves and sustain below 16240. In view of the stiff resistance range ahead, it would be safe to try long call above 16800 but day trader can even try if it maintains above 16297.       

Please note that the range for the week starting from 9-5-2016 is between 16719.40---16186.25 and either side breakout will decide which way it will move or else it will move in this range. It is therefore suggested to structure your trade keeping the above range in mind. The bias is on the downside as of now but today’s move created some hope that it can still move up , therefore traders can try both side trade depending on the price movement and considering the above range .

                                    TRADING OPTION FOR-9-5-2016

1. Long trade can be tried if it maintains above 16297 with a stop loss of below 16240 for a target of 16450/16560/16650. But in light of stiff resistance range of 16400---16530---16650--16800 ahead, it would be safe to try long trade above 16800.

2. Sell if it moves and sustain below 16240 with a stop loss of above 16300 for a target of 16186/16071/15950/15850 and can add on position if it moves and sustain below 16186 with a stop loss of above 16240.

3. In view of the huge resistance range of 16400---16530---16650--16800 ahead short call can be attempted on the rise but not above 16610 and the possible sell points could be at 16510/16610 with a stop loss of above 16720. It could be a risky trade but worth trying.

 Remark: - In view of today’s move long call can be attempted above 16297 but should be handled with extreme caution because of tough resistance ahead. Short call can be attempted if it moves and sustain below 16240. Please initiate your trade after watching the market for at least 30-45 minutes.  

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.