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

CNX-NIFTY

Open-8404.35—High-8423.65---Low—8340.95—Close—8349.35 on

20-1-2017

Support:-8340.95/ 8322.25/8293.80/8274.95/8223/8210.10/8185/8063.

Resistance: - 8373/8460.30/8461.05/8476.70/8506/8518/8558/8598.45/8678.75.

It gave adequate signal in last couple of days that it could slip into corrective mode (see my last few post), first it broke the chain of higher top and bottom on the line chart, secondly it could not sustain above its top end of the long term moving average which was at 8427 for 20-1-2017 although it did close above it for a day and finally it could not cross the tough resistance range of 8419-8485(see my earlier post).

Today’s down move has given severe jolt to the on-going up move as it  effortlessly broke the multiple support area in the range of 8378—8373 on the bar chart, broke  short term moving averages and is running way below its top end of the long term moving average range of 8428---8230(it changes every day) for 23-1-2017. Looking at the intensity of the fall today and its close near the weekly low of 8340.95, it seems that fall may further accelerate and could last for few days. But moving down it will find good support in the range of 8327---8230 and then from, its critical benchmark point of 8210.10 & 8185.80 for the year 2017. So it may bounce back from the range of 8244—8230---8210 or earlier, but if it consistently starts trading below its last long term moving average which is at 8230 (it changes every day) for 23-1-17 then it could break the benchmark points for 2017 too and may slip into deep down correction.

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 but can be tried on decline near 8244—8230---8210 but not below 8210with a strict stop loss of below 8170 or if it gives some indication of correction completion at any point of time. Instead short call can be tried now below 8340 with a stop loss of above 8374 for a target of 8327/8312/8294/8274.95/8244/8230/8210 or on the rise but not above 8420 with a stop loss of above 8440.

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.

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.