NIFTY 50 - Technical View for 15-19 June 2020

Outlook

The long term trend is still down. Short term trend is up but it is in corrective mode therefore long trade is not suggested till the under mentioned conditioned are fulfilled. However aggressive trader can try long trade with extreme caution and care as the ongoing up rally is not fundamentally backed therefore chances are that it may end abruptly also and it has shown trailer of it on 12th June 2020. Therefore short trade should also be attempted at suggested levels.

 

Trading Strategy

Detailed View

Further to my last post of 8.6.2020, it moved in a projected range for the first three days of the preceding week and made a high of 10328.50 but did not cross the first sell point of 10385, similarly it did not break the strong support levels of 10046---9970.80 & 9944.40. But on the 4^th day it broke all the three support levels on the closing basis, furthermore it decisively went below all its long term moving averages and lastly and most importantly that it made lower top and bottom on the chart giving an indication that it could go in for deep correction and on the 5^th day it opened with a huge gap down at 9544.95 and made a low of 9544.35 and then recovered sharply and made a high of 9996.05 for the day before ending the day near the high at 9972.90.

It started correcting on the 4th day and today it strongly corrected intra day but closed on a very strong and positive note indicating strength. It is important to mention here that the real corrections are on the closing basis therefore today’s strong up move after intra day huge down slide seems well orchestrated or may be a fake up move, if it is so then it may not last and can fizzle out in 1-2 days because it is making lower top and bottom on the line chart and well below its all long term moving averages on the daily and weekly chart. So it seems that correction is still on and will only complete when it starts making higher top and bottom i.e. it closes above 10116.15 and then on the down move should not break 9902 as of now (the top & bottom figures will change if it makes another lower top & bottom) and if it is in a strong corrective mode then it may not close above 10046.65 level even.

In view of the above observation it seems that the correction is not yet over therefore for safe traders long trade should be avoided till it starts making higher top and bottom and stays above some of its long term moving averages but aggressive trader can try long trade as long as it holds 9970.80 & 9944.40(bear market threshold point) on the closing basis. Moving up it will face stiff resistance from its long term moving averages, tops and bottom at 10041--10116.15—10158.30—10195—10240—10328.50—10360—10395—10460—10490.95—10551.20---10583.65---10600---10640. It will gain strong strength if it moves above 10583.65 and sustain on the closing basis. Since the correction is supposedly on therefore short trade should be attempted on the rise near or within the critical range or on the price breakdown. Moving down it will find good support at 9970.80—9944.40—9889.05—9868.75---9726.25---9685.55---9663.59---9584.50—9544.35. Please note that sustained break below 9944.40 will indicate that it could reasonably correct and sustained break below 9663.59 as of now will confirm that it is definitely in correction mode and fall may accelerate. 

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.

Contact me for strategic guidance to enter and exit trade.

Thanks,

Narendra Kumar Surana

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

 

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 favorable 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.