A TECHNICAL VIEW ON CNX-NIFTY---7.4.2020

CNX-NIFTY

Open-8356.55--High-8356.55—Low-8055.50—Close-8083.80 on 3.4.2020

Support:8055/7997/7946.74/7893.80/7816/7723.85/7691/7551—39---16—511.10/7422/7241/6825.80/6581/6357.10/6338.50.

Resistance:8148.50/8269/8336/8553/8600/8672.07/8801.14/8996.60/9038.90/9119.20/9269.20/9341/9448.75/9685.55/9687.55/9944.40.

 (Bold and underlined figures are most important)                                                                       

Further to my last post of 30.3.2020, it moved as expected and it oscillated in the range of 8150—8672.05—8801.14 for 3 days and then broken the range on the downside and ended the week at 8083.80 very near to the low of the week which was at 8055.80, closing near the low is a bad sign and break below 8055.80 may take it down further with reasonable force. It’s most crucial and critical point is at 7946.74 and sustained break below this mark on the closing basis for at least 3-4 days will open the downside up to 6850—6800 which may please be noted. The trend is bearish therefore it will drift down in coming days /weeks. But it may stage pullback rallies from time to time.   

The technical parameters and indicators are weak but it tried to stay afloat above its short term moving averages for 2-3 days week but could not sustain and finally broke it down decisively, so now it is still well below its short, medium and long term moving averages on the daily & weekly Charts with negative crossovers in some cases which are a very bad sign. But some indicators are in oversold territory and particularly the RSI indicator is showing positive divergence on the daily chart but on the weekly & monthly chart it is showing huge negative divergence, so it may seek much lower levels in time to come. It is important to mention here that positive divergence appearing on the daily chart may not come into play because the moving average placements are not supporting it now, therefore chances of negative divergence which is appearing on the weekly & monthly chart coming into play is pretty strong at this point of time.

Kindly note that as of now the upside looks capped in the range of 8300—8475---8600 in case it stage a pullback rally in the coming week starting from 7-4-2020,but it moves above 8600 and sustain then it could go higher, chances of which looks slim at this point of time. Similarly break below 8055 will open the downside and sustained break below its most crucial and critical point of  7946.74 and then below 7816 on the closing basis for at least 3-4 days will open the downside up to 6850—6800 or lower may be up to 6580,which is very likely.

It is needless to mention that it is in bear phase; therefore sell on the rise strategy at appropriate points would be the best thing to do till bottom formation clarity emerges. Therefore it is suggested that long trade should be completely avoided as of now. However those who wish to take pullback rally advantage can try long trade at proper levels (see support & resistance) with strict stop losses. But mind you long trade could be a very risky affair and can trap you unaware.

  

 IMPORTANT NOTE: - Be alert in short trade if it closes above 8600 &8801.14 and be alert in long trade if it closes below 7946.74 & 7816.

 Remark: - The bear market is confirmed and I once again reiterate that this time possibly it is going to be very painful bear market both time-wise and price-wise. Therefore it is likely to seek much lower levels from here in days to come and very likely to break the bottom of 7511.10 it made on 24.3.2020 in coming days; However in between relief rally could be there but one should avoid long trade till bottom formation signs are visible because these rally can trap you. 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 favourable  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.