CNX--BANK NIFTY-A TECHNICAL VIEW 27-1-2017

CNX--BANK NIFTY

Closed at 19473.20 on 25-1-2017(Open-19120.05/High-19518.45/Low-19114.15)

Support:-19276.50/19158/19096.70/19059/18961/18781.25/17739.65/18722.85/18551/18537/18515---18441/18443.65/ 18242.10/18177.20/18143.70/17952.60/17929/17910/17606.

Resistance:-19493.50/19587.80/19625/19666.80/19730—35/19816.50/19922.70/20163/20227.20/20264.80/20309.65/20541.65/20575.80/20628/20907.55/21080.

Today's robust up move has brought it almost at par with Nifty as far as technical parameters are concerned. It has closed way above its recent top of 19164.50 on the line chart and also above its recent top of 19276.50 on the bar chart thus giving an upside breakout on both the line and the bar chart, which indicates that it may rise further from here in coming days.

It is showing tremendous strength as it closed with a huge gain of 449.69 points and near the high of the day crossing some of the important levels, so it seems that it has turned buy on dip market again but today’s relentless up move and the volatility it exhibited was slightly scary. Please note that today was the end of Jan-2017 future series and   this type of rise on the series settlement day can be due to short covering also, if it is so then sustaining today’s vertical rise could be difficult, furthermore it opened with a up gap today and did not make any effort to fill the gap during the day, so if it attempts to fill the gap in next 2-3 days which is technically possible, then it could come down to 19054 which may please be noted.

It is also very important to mention here that it has already retraced more than 61.8 %( 19441.68) from its major top of 20575.80 and bottom of 17606.90. So this rally may exhaust here also but if this rally has to move on it has to cross 19982.02 level and sustain or else it may fizzle out around this level or earlier. Moving up from here it will face resistance in between also at 19565/19676/19735/ 19816.50/19875.13/19922.70 points, which may please be noted. So, overall no doubt that the market is for long trade now but looking at the volatility and wild movement trade should be handled with extreme caution.

In view of the above observation long trade can be tried above 19475 with a short stop loss of below 19400 or buy on decline near the breakout point of  19276.50 and then near 19165 but not below it  with a stop loss of below 19040. It would be safe to buy above 19475 on 27-1-2017. The upside target could be 19565/19676/19735/ 19816.50.

Please note that if it opens with an up gap on 27-1-2017 i.e. above 19518.15 then wait for some time to initiate long trade because it may fill the days gap, and if it does and sustain above 19475 then one can initiate long trade but the aggressive trader can initiate long trade even on the gap up opening with a stop loss of below 19430(it could be slightly risky trade). It is important to mention here that continuous gap up opening speaks of good strength but are not that safe for sustained rise. It is therefore suggested to handle your trade very vigilantly in case of gap up opening.     

Remark: -It is exhibiting robust strength but in view of the overall observation it seems that it is evenly poised with an upward bias as of now. Therefore long call can only be tried above 19475 and avoid buy on decline today.

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.