CNX-NIFTY- A TECHNICAL OBSERVATION -22-12-2016

CNX-NIFTY

Open-8105.85—High-8112.55---Low—8053.25—Close—8061.30 on

21-12-2016

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

Resistance:- 8121.95/8126/8139.45/8224.50/8230.65/8244/8257.42/8261.75/8274.95/8300/8337.90/8371/8402/8445/8476.70/8489/8506/8518/8540-8555/8598.45.

It violated its recent important bottom of 8056.85 intraday, but managed to close shade above it. It has been falling continuously for last six days and today’s move indicate that fall may still continue before it makes a short to moderate up move and the possible point from where it can make a short bounce could be 7988, but sustain break below this point can break its recent major bottom of 7916.40 fast which may please be noted. The overall technical setup is weak and indicates that further fall is imminent in coming days/weeks as of now; therefore one should be extremely cautious in long trade at least.

In view of the above observation, it is suggested to avoid long call in general and below 8050 for sure and can only be tried if it holds the range of 8000- 7988 for a short bounce back only because the trend is down. But since it has been falling for last six days it could give short bounce back any time also therefore aggressive trader can try long call if it sustain above 8065 with a stop loss of below 8050 but mind you it could be a risky trade. Please note that it is clearly sell on the rise market now therefore short call could be a safer bet and can be tried below 8050 with a stop loss of above 8092 for a target of 8000/7992/7988/7952 or on the rise  but not above 8121.95 with a stop loss of above 8140.

 I once again reiterate (see my earlier post) that 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 the downtrend now. It is therefore suggested to avoid long call completely  as it is sell on the rise market now, therefore sell call could be a better option and can be tried as suggested above. 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.