A TECHNICAL VIEW ON CNX-NIFTY---16.3.2020

CNX-NIFTY

Open-9107.60--High-10159.40—Low-8555.15—Close-9955.20 on 13.3.2020

Support: 9951.90/9944/9685/9626/8964/8801.14/8654.75/8555/8148.50.

Resistance:10004.55/10138.60/10289.50/10333.85/10440.55/10447.62/10489/10583.65/10637.15/10670.25/10746.35/10782.

 (Bold and underlined figures are most important)                                                                       

 As envisaged in my last post of 9.3.2020, it behaved the way as anticipated but the intensity of the fall was unexpected. It witnessed huge volatility during the preceding week, please note that this kind of volatility is not a good for a steady and smooth market. It plunged down sharply on the last day of the week; it opened with a huge down gap and made a low of 8555.15 and then vehemently bounced back and hit a high of 10159.40 for the day before closing the day at 9955.20. The down gap it created for the day has been filled during the day. But the down gap it created on 6^th, 9th &12^th March are still there and if it makes an effort to fill these gaps it can come up to 11244.60/10827.40 &10334 levels respectively but chances of filling the first two gap is looking slim at this point of time but it can still try to fill the gap it created on 12^th March in next 3-4 days and if it does then it can come up to 10334 else it may not fill this gap also now.

It is important to note that it has slipped into the bear phase because it has decisively fallen below the threshold point of 9944.40 intraday, which is 20% correction point from the top of 12430.50 which confirm that the bear phase has begun. However it managed to close shade above this mark on 13.3.2020. The technical parameters are also going from bad to worse and it is well below its short, medium and long term moving averages on the daily & weekly Charts with negative crossovers in some cases which is a very bad sign and indicate that the downside is still open and the latest low of 8555.15 it made on 13.3.2020 could be breached in time to come , but the only possible respite could be that some technical indicators are showing that it is in oversold zone, so it may stage relief rally from time to time but in longer time frame it is expected to drift downward as of now. Moving down its critical & important support points are at 9944.40/9685--26/ 8964/8801.14 /8555.15/8148.50/7946.74/7893.80 similarly going up it will face stiff resistance at 10334/10583.65/10637.15. The range as of now is between 10583.65---9944.40---9685---8801.14.

The trend is down and it has entered into the bear phase after 2008 and it seems that it is going to be very painful bear market this time. Kindly note that sustained break below 9944.40 can take it down sharply (see support points mentioned above for the down targets) and sustained break below 8801.14 would indicate that it can test or break the bottom of 7893.80 it made on 26.12.2016, which may please be noted. Similarly if it moves up and sustain above 10160 (on the closing basis) then it can go up to 10334-75 or above. But it can only expect to regain some strength if it moves above 10583.65(on the closing basis) and sustain, chances of which seem less likely as of now. So in view of the above observation it is suggested to avoid long trade till visibility on bottom formation emerges instead sell on the rise at appropriate points would be a better option . However those who wish to take advantage of the relief rallies can structure their trade with the help of support and resistance levels mentioned above, but mind you it could be a risky trade.     

IMPORTANT NOTE: - Be alert in short trade above 9944.40/10375 & 10583.65 and be alert in long trade below 9944.40 / 8801.14 &8555.15.

 Remark: - The bear market is almost confirmed but it can be said more emphatically after 5-7 days. It is very much expected to drift down and likely to break its recent low of 8555.15 in coming days/weeks. So long trade should be avoided till bottom formation signs are visible. It is therefore suggested to adopt sell on the rise strategy as of now.  The bias is hugely bearish.     

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.