CNX-NIFTY- A TECHNICAL OBSERVATION -19-12-2016

CNX-NIFTY

Open-8178.20—High-8178.70---Low—8127.45—Close—8139.45 on

16-12-2016

Support:-8121.95/8056.85/8002.25/7992/7952.55/7946/7935/7927/7916.40/7897/7859/7807/7735-7714.

Resistance:- 8224.50/8230.65/8244/8257.42/8261.75/8274.95/8300/8337.90/8371/8402/8445/8476.70/8489/8506/8518/8540-8555/8598.45.

It moved in a short range of 108 points during the week and ended the week near the low which is a bad sign. The technical setup is very weak and the pullback rally seems to be over, therefore it is expected that the down move should continue. However the range for the week starting from 19-12-16 is between 8230.65—8121.95 and breakout on either side will decide the movement for the week. But please note that its moving average placements are also bad with negative crossover in certain combinations and it is running below all its short and long term moving averages now and the latest long term moving average is placed at 8177.58(it changes every day) for 19-12-2016.Therefore chances of going down looks bright.

In view of the above observation it is suggested and safe to avoid long call below 8177.58 for sure and can only be tried if it moves and sustain above 8230.65(see my post of 16-12-16), however aggressive trader can try long call if it maintains above 8121.95 with a stop loss of below 8100 but it could be a risky trade mind you. Since the up move is possibly over therefore it is suggested to adopt sell on the rise strategy at appropriate points but not above 8231 with proper stop losses, sell for sure below 8121.95 with a stop loss of above 8145 for a target of 8077/8056/8000.  

I once again reiterate that (see my last post) it will gather down momentum below 8056 and fall will accelerate once it breaks it’s very important support range of 7946.35 to 7897.28(see my post of 26-11-2016 & 7-12-2016), which is likely to happen in coming days/weeks/months and in that case it will find next strong support in the range of 7714—7644 and then at 7331-7254.

Remark: - The uptrend is severely threatened and it is already in downtrend now. The pullback rally seems to be over therefore it is suggested to adopt sell on the rise strategy as suggested above or sell below 8121.95 for sure. The long call should be avoided and can only be tried if it sustain above 8230.65 for some time. The overall technical setup is 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.

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.

Note: Price stated here is of spot market.

Contact me for strategic guidance to enter and exit  trade.