CNX-NIFTY- A TECHNICAL VIEW -18-1-2017

CNX-NIFTY

Open-8415.05—High-8440.90---Low—8378.30—Close—8398 on

17-1-2017

Support:-/8380/8350/ 8330/8306.85/8294.95/8274.95/8259.35/8243.80/8230.65/8210.10/8185.

Resistance: -8400.35/ 8425/8433/8476.70/8506/8518/8558/8598.45/8678.75.

It opened on a flat to positive note and moved up further and made a high of 8440.90 for the day but could not sustain at the upper level and slipped down and closed below its recent top of 8407.20 and bottom of 8400.35 on the line chart, so the higher top and bottom chain which started from the bottom of 7908.25 is broken on the line chart, which is a weak sign and if it does not move and close reasonably above 8413 in a day or two the down correction may deepen. Furthermore in last three trading session it  also moved above its last long term moving average intraday which is placed at 8424.38 or say 8425 (it changes every day) for 18-1-2017 but could not sustain above it on the closing basis is also a weak sign. However as long as it is holding the level of 8373 on the bar chart or if it close above 8413 and then move and sustain above 8425 in a day or two then it could still continue the up move, but break below 8373 mark may accelerate down correction for a while before it could resume the up move again. It is therefore suggested, to be highly vigilant and cautious in the long trade at this point of time because today’s move indicates that there is good chance that it could slip into deep corrective mode.

It is important to mention here  that as long as it is above its benchmark points of 8210.10 & 8185.80 for the year 2017 there is no serious threat to the uptrend.

                                             TRADING STRATEGY

1. Long call can be tried above 8413 but it would be relatively safe to try long call if it moves and sustains above 8425 for some time with a stop loss of below 8390. The upside target could be 8442/8461/8477/8506—8538/8558/8598.45.  

2. Aggressive trader can try long call on decline at appropriate points  but not below 8294 with a stop loss of below 8230, it could be a risky trade but with even chances.

3.  Since it may slip into correction from here, so short call can be tried on the rise near but not above 8430 with a stop loss of above 8445 or sell below 8373 with a stop loss of above 8413 for a target of 8350/8330/8306/8275. It could be a risky trade but worth trying.

Remark: - As of now it is a buy on dip market. But today it has broken its recent top and bottom on the line chart, so it may slip into deep correction if it does not make a higher top now i.e. closes above 8413 and then move above 8425 and sustain. It is therefore suggested to try long call above 8425 only. I would personally prefer to avoid long call till it closes above 8425 or else try it after a reasonable decline. Instead I will try sell call 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.

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.

Note: Price stated here is of spot market.

Contact me for strategic guidance to enter and exit  trade.