CNX-NIFTY--A REVIEW (IT IS IN CORRECTION MODE NOW AND CRITICALLY POISED )-6-11-2016

CNX-NIFTY

Support:-8400/8398/8353/8336/8287/8063/7992/7946/7935/7927.

Resistance:-8476.70/8489/8506/8518/8540-8555/8625.70/8653.15/8661/8669.60/8678.25/8728.35/8736.95/8745.

I feel that the observation in my last post of 24-8-2016 was relevant and valid till date as it moved within the mentioned range for so long. The range was 8476—8517---8661—8730—8930(see my post of 24-8-2016). It did close above 8930 for a day on 6-9-2016 and next day hit a intra-day high of 8968.70 but could not sustain above 8930 on the closing basis and thereafter started making lower top and bottom but defended the critical and breakdown point of 8476.70(see my post of 24-8-2016). But it has broken this critical point on 4-11-2016 which is a bad sign because sustained close below this mark can drag it down sharply. Going down it may find support at 8324/8172/8135/8052, it may stage a bounce back from any of these points but sustained close below 8052 could dent the long term uptrend. Similarly moving up it would face resistance at 8463/8507—8555/8625.70---8679/8728---8745.

Please note that as of now the long term uptrend is still intact as it is above all its long term moving averages but it is pretty to close to the upper band of the averages now so it dangerously poised. The range of long term moving averages is between 8431.50—8052(it changes every day) for 7-11-2016. Please note that break and sustained close below   8431 will be a threat to the on-going uptrend and sustained break and close below 8052 may end the uptrend. The few technical indicators are also pointing that a reasonable to severe fall could be imminent and the level of 8052 may be taken out in coming weeks/months. Furthermore I once again reiterate (see my post of 5^th and 24^th August-2016) 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 severe down correction or a crash like situation now, such as huge upsurge in value of small and mid caps stocks irrespective of the fundamentals and flurry of IPO’S in last few months.  The down correction is already on and in last two trading session small and mid cap stocks have taken severe beating then the large cap stocks the up momentum is shaken by this beating and if it continues for another day or two then it will be difficult to regain the up momentum again very soon therefore it has to be seen how this on-going correction culminates. The things are not looking that great technically. So be careful in long commitments as of now.  

It is important to mention here that U.S.A election is ahead next week and the outcome of it could impact the stock market world over in either way for a while and huge volatility could be witnessed. but eventually fundamentals of your own  would come into play and guide your market. So be vigilant and cautious in the market for at least the coming week.   

Remark: - It is still in long term uptrend.  But it is in correction mode now and it is precariously poised because long term uptrend could be threatened if it breaks 8431.50 and sustain below it, therefore it is suggested to avoid long call below 8430 furthermore market could witness huge volatility in wake of U.S election outcome in coming week, it is therefore suggested to keep your trade commitment light.The overall technical setup looks bearish. 

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.