A TECHNICAL VIEW ON CNX--BANK NIFTY FOR --9.7.2020

CNX--BANK NIFTY

Open-22700.90--High-23080.60--Low-22499.50—Close-22584.65 on 8.7.2020

Support:22480/21967/21807.40/21768/21462.40/21122.10/20926.45/20316/20122.25/20010/19507.

Resistance:22996.40/23080.60/23611.40/23822/23923.30/24045/24240.

Critical Points moving up:--22848—23000—23255—23750.

Critical Points moving down:--22572---22480---22257---22003---20926.45.

(Bold and underlined figures are most important)

It opened with an up gap at 22700.90 and went up steadily and made a high of 23080.60 but in the late afternoon it plunged down sharply and made a low of 22499.50 and finally closed near the lower band of the day which is weak sign. Since it could not hold within its important range of 23000—23255 (see sell range in my post for 8.7.2020) therefore it corrected but the uptrend is still intact as of now. It has 3 critical points at 22572.22(it can change also depending on the price movement) ---22479.55---21852 sustained break below 22572.22 on the closing basis will signal that it can slip into correction mode and sustained break below 22479.55 on the closing basis will confirm the down correction and sustained break below 21852 on the closing basis may end the ongoing up move for now. The technical setup is o.k. despite today’s fall, so if it has the strength it should stay above 22572.22 on the closing basis and if it doesn’t then correction could deepen. Moving down it will find good support at 22480---22257---22003---21749—21434—21357 levels and any of these could be the possible correction completion points also, which may please be noted. 

In view of the above observation it still looks good for up move, but in light of today’s severe down move from the top, it is suggested to avoid long trade below 22572.22 for sure because then it could slip in for good correction. Therefore long trade can only be tried if it maintains above 22628 for a reasonable period of time during the day. Please note that if it has the strength then it should cross the high of 23080.60 it made today in next 3-4 trading session  else it may be construed that the top is in place at 23080.60 for the time being. Since it corrected today therefore short trade should also be attempted in the critical range or on the price breakdown for taking advantage of corrective move or a possible rally breakdown.      

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. 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 move and maintains above 22628 for some time with a stop loss of 22460. It could be a risky trade but worth trying.

2. Sell on the rise near 23100—23255(S/L-23350).

Or

Sell if it maintains below 22570 for some time with a stop loss of 22640. It could be a risky trade but worth trying.

Or

Sell if it maintains below 21850 for some time with a stop loss of 21940.

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.