TECHNICAL VIEW ON NIFTY--50 FOR THE WEEK STARTING FROM---22.6.2020

NIFTY 50 – Technical View

Period: 22 – 26 June 2020 |Author: Narendra Kumar Surana

As- of 19 June 2020
Open	10119		Key levels	L1	L2	L3	L4	L5	L6
High	10272.40		Support	10200	10171.67	10038	9970.80	9944.40	9880
Low	10072.65		Resistance	10272.40	10370	10430--490	10551	10583.65	10670
Close	10244.40

 

Outlook

The short term trend is up technically; therefore long trade can be initiated on decline and at other appropriate points too. But it is important to mention here that the ongoing up rally is not fundamentally backed and is purely liquidity driven so be vigilant because  it may end up abruptly also, therefore long trade should be handled with extreme caution and care. Since, this rally can culminate surprisingly, therefore it is suggested that short trade should also be attempted at critical points.

 

Trading Strategy

Trade	Trigger	Stop loss	Risk
Buy	If it does not go below 10172 in two hour of trading	10130	Slightly enthusiastic trade, could be risky but worth trying.
Buy	On  decline at appropriate points but not below 10038	9930	Looks safe as of now.
Buy	If it maintains above 10273 for some time.	10220	Could be a risky trade, but worth trying.
Sell	Critical points-10370-10485-10584	10400—10520--10620	Contrarian trade therefore risky, but worth trying.
Sell	If it does not move above 10273 in first two hours of trade	10300	Could be a risky trade, but worth trying.
Sell	If it maintains below 10038 for some time	10070	Looks moderately safe.
Sell	If it maintains below 9944.40 for some time	10045	Reasonably safe.
Sell	Definitely if it maintains below 9880 for some time	9960	Extremely safe.

 

Detailed View

Further to my last post for 19.6.2020, as expected correction ended and up move began on 18.6.2020 itself as it crossed its lower top of 9914 and made a higher bottom at 9881.15, thereby making higher top & bottom, furthermore it also moved reasonably above some of its long term moving averages, which is a good sign, so the short term trend is up and it is expected to move higher with in between down correction from time to time as long as it makes higher top & bottom. Therefore as of now it is buying on decline market technically. I once again reiterate that the ongoing rally in Indian and in the rest of the world markets are completely defying the economic, fundamental and geopolitical conditions and are purely driven by liquidity; therefore chances are that it could end up abruptly also.  It is therefore suggested to try long trade as suggested above but with extreme caution. Moving up it will face stiff resistance at 10370—10430-490—10551—10583.65 but sustained close above 10583.65 will give it extra strength to move much higher and it can move to the level of 11270---11447 which may please be noted. Since this up rally is purely liquidity driven, so chances are that it may fizzle out without giving any proper signal , therefore short trade should also be attempted as suggested above .Moving down it will have support at 10171.67—10143.44---10038---9970.80--- 9944.40---9881.15, sustained break below 10038 will indicate weakness, break below 9944.40 will indicate that it could slip in correction again and sustained break below 9881.15 as of now (this figure may change)on the closing basis will confirm that it could go in for further deep correction. The short term bias is up as of now therefore one should be alert in short trade too.

NOTE: - If it opens up with huge gap up then wait for it to settle down before initiating long position, but short trade can be attempted on huge gap up if it is near the selling point and vice versa . Since, it is showing volatility so any type of trade should be squared off during the day, if you don’t have reasonable profit margin in the trade. However day squaring off is strongly suggested in any case.

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.

Thanks,

Narendra Kumar Surana

suranank@gmail.com | +91-9831313654 / 8240951127