CNX-NIFTY- A TECHNICAL VIEW -10-2-2017

CNX-NIFTY

Open-8795.55—High-8821.40---Low—8724.10—Close—8778.40 on

9-2-2017

Support: - 8757.60/8740.95/8672.70/8641/8598.45/8564/8555/8518/8506/8493.95/8476.70/8461.05/8460.30/8400/8373/ 8327/8293.80/8274.95/8223/8210.10/8185/8063.

Resistance: -8801.05/8821.40/8830/8844.80/8849.75/8874/8893.35/8913.45/8968.70/8996.60/9119.20.

It is witnessing huge volatility and yesterday move gave an indication that a short bottom is in place at 8715(see my post of -2-17) but today it came very close to it and that has created a doubt in the mind that it may not be the bottom because had it been the bottom it should not have come so close to it the very next day. However it recovered later in the day and closed with a meager gain of 9.35 points. Since it respected the yesterday’s low of 8715 and closed way above it therefore it would be a good support level or may be a valid bottom also but that has to be seen in next 2-3 days time whether it holds it or not. Please note that it is behaving in a very treacherous way with volatility and wild swings therefore trading may not be easy now.  So please note that moving up it will face very stiff resistance in the range of 8830----8874 and thereafter at 8969 & 9045 and it has to sustain above 8754 to keep this up move going and then move and sustain consistently above 8874 for attempting to test or cross its previous all time high of 9119.20. Similarly moving down it will find support in the range of 8754----8672.70----8537.50 and in between support at 8643/8590 but break and close below 8672.70 will indicate weakness in the on-going uptrend and break and sustained close below 8537.50 will confirm that up rally may be over for the time being and fresh down move may begin.

  

It is important to mention here that although it held yesterday’s low and closed higher today, but since there is good volatility and wild swing in the market which is not good for steady up move, therefore it could be a  distribution at higher level also and if it is so then moderate to good fall is ahead.   Therefore it is suggested to structure your trade keeping the aforesaid range and points in mind or else wait till the market finds its normal rhythm before initiating any trade because volatility kills in both side trade. The overall bias is up as of now.

In view of the above observation it would be relatively safe to try long call once it closes above 8801.05. However aggressive trader can try long call if it moves and sustain above 8786 for some time with a stop loss of below 8754 for a target of 8802/8830/8874. Looking at the volatility, it could be a risky trade.

Remark: - Although it closed positive but volatility and today’s reversal like move was concerning and despite showing firmness at the end it could still slip down  from here therefore  watch out for 2-3 trading session  to confirm whether it holds 8715 mark or not. Therefore I would personally wait for a close above 8801.05 for initiating fresh long call or else will try long call on reasonable decline at appropriate points but not below 8537.50 with a stop loss of below 8490.

 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.