A TECHNICAL VIEW ON CNX--BANK NIFTY FOR THE WEEK STARTING FROM—6.7.2020

CNX--BANK NIFTY

Open-22101.75--High-22130.30--Low-21768—Close-21852.40 on 3.7.2020

 Support:21807.40/21778/21462.40/21122.10/20926.45/20316/20122.25/20010/19507.

Resistance:21967/22344.85/22479.55/22996.40/23611.40/23822/23923.30/24045/24240.

Critical Points moving up:--22480—22830—22940—23200--23830.

Critical Points moving down:--21778---21500---21180---20926.45.

 (Bold and underlined figures are most important)

It is showing tremendous weakness in comparison with Nifty-50, it has not been able to retrace and sustain above the 38.20% mark of the entire fall which is at 22418 whereas Nifty-50 is above 61.80% retracement mark at present and exhibiting superb strength.

It has three critical points at 21778, 21500 & 20926 and it is above all of them now which is a positive sign. But it will pick up momentum only if t moves above its recent top of 22479.55 and sustain on the closing basis then it could open up the upside up to 24350 but moving up it will find tough resistance at different points as mentioned above, so the up journey may not be smooth. Since it is above its short and medium term moving averages therefore further up move is not ruled out as long as it holds 21778 on the closing basis.

In view of the above observation it is showing less technical strength but chances of moving up are still there till it holds 21778 on the closing basis. Therefore long trade can be tried on decline but not below 21778 or try if it maintains above 22170 for some time, it would be relatively safe trade. Please note that sustained break below 21778 will signal that it can slip in to correction mode and sustained break below 21500 can accelerate the fall and sustained break below 20926 on the closing basis will confirm the end of the up move.Therefore short trade should also be attempted at critical range or point to take advantage of correction or may be a possible rally breakdown. The bias is slightly up as of now.

I make it a point to mention in almost my all post that the upsurge in the entire world market is purely liquidity driven and completely defies fundamentals therefore it can end mischievously because there is a saying that money comes fast and it goes away even faster. So be vigilant and extra cautious in the long trade.

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. Day squaring off is strongly suggested in any case.

TRADING STRATEGY

1. Buy if it maintain above 22170 for some time with a stop loss of 22050.It could be a risky trade.

Or

Buy on decline but not below 21778 with a stop loss of 21650.

2. Sell on the rise near 22950—23200(S/L-23300).

Or

Sell if it maintains below 21778 for some time with a stop loss of 21880.

Or

Sell if it maintains below 21359 for some time with a stop loss of 21510.

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

Mobile—8240951127/9831313654.