A TECHNICAL VIEW ON CNX--BANK NIFTY---23-102017

CNX--BANK NIFTY

Open-24238.40--High-24255.30--Low-23923.70—Close-24009.75 on

 19-10-2017

MajorSupport:- 23978.40/23923.70/23897/23852/23822.20/23708.65/23611.

MajorResistance:- 24103.30/24151—156/24331.85/24422.45/24455/24494.35/24496.20/24591/24651.05/24791.5524878.65.

For-23-10-17 the intra-day short support and resistance levels are given here-under:-

Support:-23978.40/23923.70/23897.85/23852.65/23822.20/23648/23611.20.

Resistance: 24103/24151---185/24240—296/24341---395/24422---455—494—497/24591/24651.

Further to my last post on 16-10-2017 it moved in an envisaged manner, it did not cross 24881.26 level therefore it did not indicate to initiate long trade but clearly gave indication to try  short trade as it did not cross the aforesaid mark therefore those who have  tried short call were suitably rewarded.

It is exhibiting tremendous weakness and in last two days it has opened with a down gap which is a bad sign, but there is a possibility that it may give an up move in next 3-4 days to fill the gap which is technically possible and if it attempts to fill the gap then it can move up to24270.05 and then 24571.85 and if it does not then not to bother about gap filling now. Furthermore it has broken  is short term rising trend line decisively and heading towards long term rising trend line which is placed at 23750—791 for the coming week and also broken short and medium term moving averages convincingly which indicates further fall ahead if it sustains below the averages on the closing basis. Looking at the price destruction moving up seems difficult but it may move up for filling the gap and in that case rise may not be sustainable and it is likely to slip again. So be careful and cautious if one initiate long trade.   

I once again reiterate here that the RSI on the weekly and monthly chart are still showing huge negative divergence and MACD on the weekly chart is still in sell mode (see my post of 16-10-17), so the indications does not seems good indicator-wise for the rise and since the prices pattern is extremely weak and it is below its short & medium term averages and if this weakness persist for few days then the negative divergence may come into play and it could see a moderate to sharp fall  in coming days/weeks. It is also important to mention here that its long term moving averages are placed in the range of 23648---23411---22370 now (it changes every day) and its recent bottom at 23611.10, so sustained break below 23648 will threaten the long term uptrend, break below 23611.10 will accelerate the fall and sustained break and close below 22370 may put the uptrend in real danger which may please be noted. 

In view of the above observation long trade is not suggested , however if it opens with a down gap again that is below 23923.70 then one can try long call near 23852—790 or try once it bounce back again above 23923.70 with a stop loss of below 23750 & 23850for a very short pull back. Long call can also be tried now above 24053 with a stop loss of below 23978 for an anticipated gap fill up but please note that trying long trade for a pullback or gap fill up could be very treacherous and can trap you unaware. The price destruction in last two days and other technical indicator indicates that short trade could be relatively a safer bet now, therefore sell on the rise strategy should be adopted and the possible sell point could be 24270---300 & then 24400—500 with a stop loss of above24350 & 24590 respectively or sell below 23923.70 with a stop loss of above 24020.  

Remark: - In last two days it has shown extreme weakness and looking at overall technical setup it may deepen further, therefore for safe trader it is suggested to avoid long call now, however aggressive trader can try long call as suggested above but it could be a risky affair. The bias is on the downside therefore, I would personally avoid long call for a pullback move and would only try once it moves above 24500 and sustain on the closing basis, instead now I would look for an opportunity to try short trade 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.

Note: Price stated here is of spot market.

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.

                                                                                     

Contact me for strategic guidance to enter and exit the trade.