A TECHNICAL VIEW ON CNX-NIFTY FOR---5.6.2020

CNX-NIFTY

 

Open-10054.25--High-10123.85—Low-9944.25—Close-10029.10 on 4.6.2020

 Support: 10004/ 9970.80/9944.40/9889.05/9700/9685.55/9600/9580/9475/9390.31/9327.85/9299/9220/9158/9141/9131/9116/9090/9038.90/9000/8967.23/8900/8860/8842.28/8801.14/8672.07/8617/8555

Resistance:-10047/10137.85/10178.95/10276.20/10333.85/10417.80/10490.95/10551.20/10557.70/10637.15/10670.25/10782.60/10941.20.

(Bold and underlined figures are most important)  

 As expected it gave both side swings today and made a high of 10123.85 and a low of 9944.25 and ended the day at 10029.10 with a loss of 32.45 points. It did break it’s both the critical points of 9970.80 & 9944.40 intraday but managed to closed above it. It filled the gap it created yesterday but the gap of 1.6.2020 is still there (see my post for 4.6.2020) so chances of it coming down to 9600 level in next 2-3 days cannot be ruled out. 

As envisaged it corrected today but as long as it sustain above its critical points of 9970.80 & 9944.40 on the closing basis deep correction may not happen and it may start moving up again  after some consolidation above these points. As you are already aware, that since it has sustained above 9970.80 for the last three days, so the upside is open up to 10551 levels (see my earlier post). But for moving up from here to the targeted point of 10551 it has to sail through a series of long term moving averages on the daily and weekly chart which are placed at 10047---130---180---240---360---390---450---490 for 5.6.2020, after hitting up to 3^rd average on 3.6.2020 it is below all the averages now, which is a weak sign. This range is a tough hurdle and looks difficult to cross easily and if it fails to move above some of the averages in next few days and sustain on the closing basis then it will give potential indication that it could break the critical point of 9970.80 & 9944.40 and then correction may accelerate.

In view of the above observation the bias is up now but looking at the series of resistance ahead it can move either way, therefore long trade should be avoided till it move above some of the averages on the closing basis, however buy on decline can be tried but with extreme caution and care because it has moved up vertically by more than 1350 points Intraday in just six days of trading. Similarly instinctive short trade should be avoided but it should definitely be tried at critical juncture or on price breakdown. Since it is stuck between strong support and resistance range now, so it will give opportunity for both side trades depending on the price movement.

TRADING STRATEGY 

1. Buy on decline near but not below 9944.40 with a stop loss of 9840. 

Or

     Buy if it maintains above 10062 for some time with a stop loss of 9990.

2. Sell on the rise near or within the range of 10150----10220 with a stop loss of 10250.

Or

Sell if it maintains below 9944 for some time with a stop loss of above 9990.

Remark: - The long term trend is down. Short term trend is up but it corrected today and stuck between strong support and resistance range now, so it may give opportunity for the both side trades. You can structure your trade as suggested above. The short term bias is up but 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.