CNX-NIFTY-A TECHNICAL VIEW FOR—9-5-2016

CNX-NIFTY

Closed at 7733.45 on 6-5-2016 (Open-7717.65/High-7738.90/Low-7678.35)

Support: - 7723.85/7714/7706.55/7691.20/7678/7667/7600/7582.25/7551/7540/7539.50/7516.85/7422/7405/7350.30/7295/7252.

Resistance: - 7777.60/7822.55/78/7890.25/7938.45//7946.35/ 7972.45/7979.30/7979.90/8055/8065/8091.80/8116/8160/8180.20/8195.65/8244/8336.

                      

As expected in early trade it gave an impression that yesterday up move may fizzle out, but later in the day it recovered and closed the day with a meager loss of 2.04 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 7692—7627(it changes every day) and bounced back, furthermore its recent bottom of 7706.55 on the line chart is intact, so as long as it holds this bottom on closing basis, chances are that it may  move up 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 7771—7825--7890(it changes every day) and from its Fibonacci retracements points at 7753/7799/7836/7872/7918. 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 7736 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 7700. In view of the stiff resistance range ahead, it would be safe to try long call above 7890 but day trader can even try if it maintains above 7736.      

  

Please note that the range for the week starting from 9-5-2016 is between 7890.25---7678.35 and the either side breakout will decide which way it will move else it will move within the 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 7736 with a stop loss of below 7700 for a target of 7778/7825/7850/7890. But in light of stiff resistance range of 7771---7890 ahead, it would be safe to try long trade above 7890.

2. Sell if it moves and sustain below 7700 with a stop loss of above 7750 for a target of 7680/7663/7630/7587 and can add on position if it moves and sustain below 7678 with a stop loss of above 7710.

  

3. In view of the huge resistance range of 7771—7890 ahead short call can be attempted on the rise but not above 7835 and the possible sell points could be at 7790/ 7835 with a stop loss of above 7875. It could be a risky trade but worth trying.

 Remark: - In view of today’s move long call can be attempted above 7736 but should be handled with extreme caution because of tough resistance ahead. Short call can be attempted if it moves and sustain below 7700. 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.