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

CNX-NIFTY

Open-8499.45—High-8612.60---Low—8493.95—Close—8602.75 on

25-1-2017

Support:-8598.45/8558/8518/8506/8493.95/8476.70/8461.05/8460.30/8428/8373/8349.35/8340.95/ 8322.25/8293.80/8274.95/8223/8210.10/8185/8063.

Resistance: - 8678.75/8728.35/8736.95/8806.95/8844/8893.35/8968.70/8996.60/9119.20.

It opened with a small up gap and did not make any effort to fill the gap and gave a robust up move and closed with a gain of 126.95 points and near the high of the day, it also crossed its first tough resistance range effortlessly which was between 8488—8600(see my post for 25-1-2017), which shows tremendous strength in it and indicates further rise ahead. Please note that 8600 will act as good support now and it has to sustain above it for the on-going up move to continue.    

Although it is exhibiting huge strength technically but the concerning part is today’s gap which it did not fill and if it attempts to fill the gap in next 2-3 days, which is technically possible then it could come down to 8480 level, secondly it has retraced more than 61.80% (8558.08) from its recent major top of 8968.70 and bottom of 7398.80. So this rally may exhaust here also but if this rally has to move on it has to cross 8791 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 8678.75/8715/8754/ 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 8603 with a stop loss of below 8540 or buy on decline near 8480--62 but not below it with a stop loss of below 8400. It would be safe to buy above 8603 on 27-1-2017.

Please note that if it opens with an up gap on 27-1-2017 i.e. above 8612.60 then wait for some time to initiate long trade because it may fill the days gap, and if it does and sustain above 8603 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 8580(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 always 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 8603 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.

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.