CNX-NIFTY- A REVIEW(LOOKS HIGHLY VULNERABLE FOR CORRECTION)-24-8-2016.

CNX-NIFTY

Support:-8600/8540/8517/8476/8398/8336.30/8287.55.

Resistance:-8728.35/8850/8920/8997/9119.20.

Further to my last post of 5-8-2016 it has failed to sustain above 8661 level for 4 days in a row but it is has not given any sharp down correction either and has been moving in the range of 8517—8728 for last one month. It could be consolidation or distribution and this has to be seen how it pans out in coming days but until and unless it sustains above 8661 level on the closing basis consistently and then crosses 8730 level, chances of this on-going up move to continue seems difficult. Please note that even if it sustains above 8661 level moving up may not be easy as it will face huge resistance at 8670/8730/8820/8850/8930 before the smooth ride begins.

It is important to mention here that since it has failed to sustain above 8661 level despite moving above this mark couple of times and closing above it also but could not sustain, so the vulnerability for down correction is increasing with each passing day. Therefore it is still suggested to avoid long trade till it closes above 8661 and sustain for at least 4 days or try it after it crosses 8730 mark or in case of down correction after reasonable decline and at proper points. So, at present trying short call on the rise with a stop loss of above 8730 could be a better idea.

It is needless to mention here that long term trend is up and it will be threatened only if it breaks the range of 8120--8040-7930 and sustain and the uptrend may end if it breaks 7800 level and sustain below it(see my post of 5-8-2016). However the range of 8476-8517-8661-8730 is critical for now and if it fails to move above 8661 and sustain and then unable to cross 8730 level soon then it could go in for moderate to severe down correction, similarly sustained break below 8476 may trigger fresh fall and the on-going uptrend may end which may be kept in mind. Therefore if it goes in for correction from here then keep a close watch on the critical figures mentioned above and see how correction culminates. Furthermore as mentioned in my earlier post that it is moving in 8 years time cycle and it witnessed crash in the year 1992, 2000 &2008 and 2016 is the eighth year again and all the ingredients are present for a down correction or a crash like situation now (see my last post of 5-8-2016), furthermore the month of September & October is always critical for the stock market world over and particularly for our markets, therefore deep down correction or a crash like situation cannot be ruled out. So be vigilant and cautious.   

Remark: - It is in the uptrend. But it is in highly vulnerable zone for correction so avoid long call now and only attempt it if it consistently sustain above 8661 and then crosses 8730 or after reasonable decline at proper levels. Short call can be tried now on the rise with a stop loss of above 8730. Crash like situation cannot be ruled out in coming days/weeks or months. Therefore extreme caution is advised.

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.