CNX-NIFTY- A TECHNICAL VIEW -16-12-2016

CNX-NIFTY

Open-8128.40—High-8225.90---Low—8121.95—Close—8153.60 on

14-12-2016

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 opened with a down gap today but recovered within few minutes and came into positive territory but finally closed on a very weak note at 8153.60, breaking its recent bottom of 8170.80 on the line chart and 8154.45 on the bar chart, so the lower top and bottom on the line chart is established, it has also broken short bottom of 8154.45 on the bar chart but the recent major bottom of 8056.85 is intact, but it has given weak indication anyway on the bar chart too, furthermore it is also below its last long term moving average which is at 8172.40(it changes every day) for 16-12-2016, so the overall technical setup now  indicates that the on-going up move may be over and fresh down move may begin. Therefore it is suggested to avoid long calls now. However off late it has been witnessing good volatility, so in case if it starts moving up again avoid long call for sure below 8172.40(it changes every day) and since it has multiple top in the range of 8230.65—8225.90 on the bar chart, therefore it is suggested to try long call only if it sustains above 8230.65 for some time  but  aggressive trader can try long call  above 8172.40 or on decline near its recent major bottom of 8056.85 with a stop loss of below 8000, but it could be a risky trade as the on-going up move has possibly ended.

Since the pullback rally seems to be over and fresh down move may begin therefore short call could be a safer bet and can be tried on the rise at appropriate points but not above 8231 with a stop loss of above 8255 but it would be safe to try it below 8172 with a stop loss of above 8207.

It is important to mention here 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 threatened and it is in intermediate downtrend now. The pullback rally seems to be over today therefore it is suggested to adopt sell on the rise strategy but it would be safe to sell below 8172. The long call 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.