CNX--BANK NIFTY-A TECHNICAL VIEW 13-1-2017

CNX--BANK NIFTY

Closed at 18873.95 on 12-1-2017(Open-18885.45/High-18966.30/Low-18805.85)

Support:-18824.40/17739.65/18713.60/18551/18537/18532/18443.65/ 18325.50/18316.25/18242.10/18177.20/18143.70/17952.60.

Resistance:- 18961.15/19059/19096.70/19125/19158/19493.50.

It is showing tremendous strength and today was the sixth straight day of rise, please note that with each passing up day the vulnerability of corrective down move also increases, furthermore vertical rise is not good for market because it may have vertical fall too and yesterday’s gap is still there which is also concerning because it could still make an attempt to fill the gap in next 1-2 days time and if it does then it can come down to 18444 level, so the situation is ideal for a corrective down move. Technically it is looking good and today it crossed its last long term moving average also which is placed at 18860.13(it changes every day) for 13-1-2017, but the vertical rise is  very concerning  for a further sustained  up move. Although it has not shown any sign of weakness as yet but corrective down move looks imminent in next 1-2 days, therefore one should be extremely careful in long trade at this point of time. It is suggested to avoid long call below 18860 because if it sustains below this mark then it may correct from here before resuming the up move again.

TRADING STRATEGY

1. Long call can be tried if it moves and sustain above 18880 for some time with a stop loss of below 18800. The upside target could be 18963/19060/19125/19158/19494.

2. Aggressive trader can try long call on decline at appropriate points but not below 18444 with a stop loss of below 18370.

3. Contrarian short call can be tried, if it consistently trades below 18860 for some time with a stop loss of above 18900 for a target of 18824/18740/18630 or sell below 18800 with a stop loss of above 18880 for a target of 18740/18630/18596/18513. It could be a risky trade but worth trying.

Remark: - As of now it is a buy on dip market, but since it had a huge vertical rise therefore it looks highly vulnerable for a down correction, which looks very imminent in a day or two, therefore long call should be handled with extreme caution at this point of time.

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.

Note: Price stated here is of spot market.

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.

                                                                                     

Contact me for strategic guidance to enter and exit the trade.