CNX--BANK NIFTY-A TECHNICAL VIEW 16-1-2017

CNX--BANK NIFTY

Closed at 18912.10on 13-1-2017(Open-18949.70/High-18952.25/Low-18781.25)

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:- 18966.30/19059/19096.70/19125/19158/19493.50.

It has moved up unabated for the seventh consecutive day, no doubt it is exhibiting good strength as it is above its recent important top of 18739.65 and also above its all short and long term moving averages and the latest long term moving average is placed at 18865.68(it changes every day) for 16-1-2017, so if it sustains above it then the up momentum is expected to accelerate in coming days. But the vertical rise is concerning and not healthy for a sustained up move, furthermore with each passing up day the vulnerability of corrective down move  increases substantially . Therefore now it looks imminent that down correction could set in any moment before it could move up further from here. It is therefore suggested to avoid long trade in general at this juncture, however aggressive trader can try long call if it moves and sustain above 18967. Since down correction seems a distinct possibility at this point therefore it would be worth trying short call near but not above 18967 with a stop loss of above 19060.   

It is important to mention here that moving up the range of 19060—19200--19280 and then from 19516-19593—19645--19745 will pose a very stiff resistance, therefore further up journey may not be smooth, so be vigilant and watchful in you trade around these range.

TRADING STRATEGY

1. Long call can be tried if it moves and sustain above 18970 for some time with a stop loss of below 18900. The upside target could be 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, near but not above 18967 with a stop loss of above 19060 for a target of 18912/18865/18824/18740/18630 or sell below 18865 with a stop loss of above 18920 for a target of 18824/18740/18630/18596/18513. 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 for seven consecutive days therefore it looks highly vulnerable for a down correction, which looks very imminent in a day or two, therefore I would personally prefer to avoid long call now instead look for an opportunity to try short call for taking advantage of a possible down correction although it is not a shorting market 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.

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.