CNX--BANK NIFTY-A TECHNICAL VIEW 23-1-2017

CNX--BANK NIFTY

Closed at 18820.80 on 20-1-2017(Open-18896.60/High-19071.65/Low-18793.05)

Support:-18781.25/17739.65/18551/18537/18515---18441/18443.65/ 18242.10/18177.20/18143.70/17952.60/17929/17910/17606.

Resistance:  18961/19059/19096.70/19158/19276.50/19493.50/19666.80.

As envisaged it corrected(see my post of 20-1-2017) and went down sharply today and broke its recent bottom on the line chart, broken short term moving average also and slipped below the top end of the long term moving average  of 18903(it changes every day) for 23-1-2017 is a weak sign but still holding on to its recent important bottom  and top of 18781.25 & 18739.65 but if it does not bounce back above the top end of its long term moving average i.e.18903(it changes every day) in next 2-3 days then it could potentially break the aforesaid bottom & top support also and slip into deep correction. But as long as it holds the bottom end of its long term moving average which is at 18209 (it changes every day) for 23-1-2017 and  it’s critical benchmark point of 18242.30 &18177.20 for the year 2017 it could still stage a comeback from any of these points or earlier possibly from 18638/18442 points.  But please note that if it consistently starts trading below its last long term moving average i.e. below 18209 (it changes every day) for 23-1-17 then it could break the benchmark point for 2017 too and may slip into severe down correction. Looking at the intensity of the fall today and its close near the weekly low of 18793.05, it seems that fall may further accelerate and could last for few days.

It is needless to mention here that it has to sustain above its top end of the long term moving average to get the smooth up momentum on.

In view of the above observation one should avoid  long call now and below 18781 for sure  but can be tried on decline near 18242.10--18209 but not below 18209 with a strict stop loss of below 18150 or if it gives some indication of correction completion at any point of time. Instead short call can be tried now below 18780 with a stop loss of above 18835 for a target of 18739/18638/18550-537/18442/18242 or on the rise but not above 18930 with a stop loss of above 18980.

Remark: - With today’s severe fall it seems that the buy on dip market may have ended for the time being and it may have turned into sell on the rise market now till it starts making higher top & bottom again. Therefore avoid long call now but can be tried in the suggested range or earlier provided it give some visible indication that the down correction is over, instead it is worth try short call at this point of time as suggested above.  

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.