A BROAD TECHNICAL VIEW ON CNX--BANK NIFTY FOR THE WEEK STARTING FROM- 18.5.2020

CNX--BANK NIFTY

Open-19098.80--High-19119.10--Low-18683.65—Close-18833.95 on 15.5.2020

 

Support:18703.45/18400/18150/17854/17340/17248.42/17143.20/16946/16759/16587/16193/16116.25.

 

Resistance:18941/19051/19155.48/19200/19635/19769/19881/19934/20010/20260/20514.75/20586.22/21122.10/21348.15/21462.40.

 

 (Bold and underlined figures are most important)

It exhibited huge volatility during the preceding week, it made a high of 20122.25 and made a low of 18287 during the week and finally ended the week near the lower bracket at 18833.95.

It has been weak technically (see my last few posts) and is in the downtrend now but in between frantic up move upset the thought process and confuses you about the direction of the market. The trend is down now for sure and any up rally should be utilised for selling only till it closes above its critical points of 19155.48---19695----20010 and sustain, therefore up move seems to be capped in the range of 19200----19695----20010---20300 on intraday basis as of now. Moving down it has the following support range.

1.18703---18400---18170--sustained break below 18170 may accelerate the fall.

2.17900---17600---17400 sustained break below 17400 will trigger sharp fall.

3. Since it has been running below its most critical point of 20010 for some time and if it stays below it, then it is very likely that it could retest or break its bottom of 16116.25 made on 24.3.2020 in coming days/weeks.

In view of the above observation it is clear that the trend is down, but in between up rally cannot be ruled, therefore it is suggested to avoid long trade till it closes above its critical points mentioned above. So it is apt for now to adopt selling on the rise strategy or sell on the price breakdown.

TRADING STARTAGY      

1. Sell on the rise in the range of 19200---19700---20010---20300 with a stop    loss of above 20400. Kindly note that the self defined stop losses can be applied by the traders but the authentic stop loss would be 20400 only.

 Or

 Sell below 18680 with a stop loss of above 18850. This is a short

 stop loss and possibly it could be triggered one or two times, but  

 one has to initiate short position again below 18850 for the

 day.

Remark: - The long term trend is down. It looks extremely weak technically; therefore long trade should be completely avoided till its closes above its critical points as mentioned above. Only short trade should be attempted as suggested above. The long term 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 are of spot market.

 

Contact me for strategic guidance to enter and exit trade.