A BROAD TECHNICAL VIEW ON CNX--BANK NIFTY FOR THE WEEK STARTING FROM- 11.5.2020

CNX--BANK NIFTY

Open-19844--High-19969.60--Low-19283.05—Close-19352.90 on 8.5.2020

Support:19271.75/19200.08/19051.95/18860/18703.45/18300/18100/17854/17340/17248.42/17143.20/16946/16759/16587/16193/16116.25.

Resistance:19655/19769/19881/19934/20010/20250/20514.75/20586.22/21122.10/21348.15/21462.40.

 (Bold and underlined figures are most important)

It opened with an up gap at 19844 and made a high of 19969.60 but could not sustain at higher level and in the afternoon plunged down and made a low of 19285.05 and ended the day near the low at 19352.90 with a loss of 138.90 points. Please note that it filled the gap during the day. 

Technically it shows terrible weakness. It has broken all its short, medium and long term moving averages decisively on the daily and weekly chart. It has made lower top also at 19694.55, but yet to break the recent bottom of 19271.75, therefore a close below 19271.75 is required to confirm that it is making lower top & bottom and for down move to gather momentum. Please note that till it happens there is a possibility that it could moving up again and if it closes above 19694.55 and then above 20010 and sustain then it may resume the up momentum again. But looking at the overall technical setup the upside seem to be capped in the range of 20010---20250 as of now, therefore long trade should be completely avoided till it moves above 20010 and sustain on the closing basis. So, short trade on the rise or on the price breakdown should be the best option as of now.

Moving down it will find good support in the range of 18941--- 18859---17854---18703---18309---18100---17850---17286.40---17143. It is pertinent to mention here that it has been closing below its critical & important point of 20010 for last five days and if it sustain below it for few more days then it could retest or break its recent bottom of 16116.25 made on 24.3.2020 in coming days.

TRADING STARTAGY      

1. Sell on the rise in the range of 19850---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 19270 with a stop loss of above 19400. 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 19270 for the

  day.

Or

 Sell below 18850 with a stop loss of above 19055.

    

Remark: - The long term trend is down. The pullback rally has exhausted and the upside seems to be capped in the range as mentioned above.  But a close below 19271.75 is important to establish lower top and bottom for the fall to accelerate. In view of the above observation long trade is a complete avoid till it moves above 20010 and sustain on the closing basis. Only short trade should be attempted as suggested above. The long term bias is 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.