CNX-NIFTY- A TECHNICAL VIEW -9-1-2017

CNX-NIFTY

Open-8281.85—High-8306.85---Low—8233.25—Close—8243.80 on

6-1-2017

Support:-8230.65/8210.10/8185.80/8162/8133.80/8077/8060/8056/8002/7992/7988/7940/7927.05/7916.40/ 7897/7893.80/7715.80/7678.35/7644/7615.85/7405.15.

Resistance:- 8274.95/8294.95/8306.85/8400.25/8476.70/8506/8518/8558/8598.45.

It steadily moved up during the week and made a high of 8306.85 on the last day of the week but slipped down to close with a small weekly gain of 58 points. It rallied by more than 400 points from 7893.80 to 8306.85 in nine trading days but with today’s close it showed some sign of fatigue therefore it seems that it may correct further from here; however it is still a buy on dip market now as it is making higher top (recent top 8273.80) and bottom(recent bottom 8190.50) on the line chart and making higher highs and higher lows on the bar chart, furthermore it is above its short term moving averages now and also above its lower band of long term moving averages range which is between 8217.67---8421(it changes every day). Please note that it will firm up once it moves above 8421 and sustain. However as long as it holds it’s lower band of long term moving i.e. 8217.67(it changes every day) the up move may continue, here it is important to mention that its most critical benchmark points for the year 2017 are 8210.10 & 8185.80, therefore be circumspect in long trade if it consistently starts trading below these points because sustained break below it may lead to a fresh down move, similarly be alert in short trade above these points.

In view of the above observation the range of 8217—8210.10---8190.50--8185 is a very good support for it. Therefore as long as it holds this range  on the closing basis the on-going rally may continue but it will gain good strength only if it moves and sustain above 8421(it changes every day). I Would therefore suggest to avoid long call if it sustain below 8185 till it bounce back above 8210.10 again in fact above its lower band of long term moving average which is at 8217.67 (it changes every day) for 9-1-2017. 

TRADING STRATEGY

1. In view of today’s movement it would be safe to try long call if it moves and sustain above 8275 with a stop loss of below 8230 and can add on position if it moves and sustain above 8307 with a stop loss of below 8265 for added position. The upside target could be 8338/8380/8421.

2. Aggressive trader can try long call on decline also but not below 8217 with a stop loss of below 8180, it could be a risky trade but with even chances.

3. Although it is a buy on dip market now but looking at today’s move a contrarian short call can be tried near but not above 8275 only if it fails to cross the said level for at least first one and half hour of trade with a stop loss of above 8307,it could be a highly risky trade but worth trying. The downside target could be 8243/8233/8217/8210/8195/8185/8133.

Remark: - As of now it is a buy on dip market but with today’s movement it advised to exercise some caution in long trade because it may correct further here before resuming the up move again. Avoid long call below 8210.10 and below 8185 for sure. If price movement permits short call could be worth trying.

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.