CNX-NIFTY- A TECHNICAL VIEW-7-12-2016

CNX-NIFTY

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

Resistance:-8151/8176—8190.45/8224.50/8250.80/8260/8295/8338/8476.70/8489/8506/8518/8540-8555/8598.45.

Today’s move gives an indication that the up rally which started after it made a bottom at 7916.40 on 21.11.2016 seems to have exhausted at 8250.80 on 1-12-2016 as expected(see my post of 26-11-2016), however the confirmation will come after it closes below 8056. But since it is below all its long term moving averages now therefore long call should be avoided below 8141 for 8-12-2016(it changes every day, now it is moving up by 4-6 points every day so adjust every days count accordingly for trade convenience) similarly short call should be avoided above this mark. The up rally may extend only if it moves above 8191 and then crosses 8251, chances of which looks slim in view of today’s move, but since today’s volatility and down move could be due to R.B.I's Credit Policy announcement also, therefore watch out the market for a day or two and see how it behaves. But the market is weak therefore in broad sense it is sell on the rise market as of now, so long call should be avoided or if entered should be handled with utmost caution and care.

Technically it is on an extremely weak footing and overall technical setup indicate that it is likely to break its recent bottom of 7916.40 and to witness much lower levels in days/weeks to come.  But since it is having bed of supports in the range of 7946.35 to 7897.28(see my post of 26-11-2016), therefore one should be very careful within this range and structure your trade accordingly. Please note that it will trigger fresh fall only once it breaks 7897 and sustain, which is likely to happen in near future and in that case it will find next strong support in the range of 7714—7644 and then at 7331-7254.

Since it is in downtrend long call is not suggested but day trader if they wish to can try long call if it sustain above 8141(adjust this figure every day as mentioned above) with a stop loss of below 8110, similarly short call can be tried below 8141 with a stop loss of above 8200.

  

Remark: - The uptrend is severely threatened and it is in intermediate downtrend now. The pullback rally seems to have exhausted, therefore avoid long call below 8141 for sure, short call seems a safer bet below 8141.  The overall technical setup is highly bearish as of now.

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.