A TECHNICAL VIEW ON CNX-NIFTY FOR --16.7.2020

CNX-NIFTY

Open-10701--High-10827.45—Low-10577.75—Close-10618.20 on 15.7.2020

 Support:10583.65/10562.90/10553.15/10409.85/10328.50/10223/10194.50.

Resistance:10637.15/10641.05/10676.55/10728.95/ 10813.10/10847.85/10894.05/10941.20/11090.

Critical Points moving down:-10583.65—10562.90---10553.15—10461.

Critical Points moving up:-10626.82---10641.05--10728.95---10813.10---10848---10896---10960—10990.

 (Bold and underlined figures are most important)  

It exhibited huge volatility today and crossed its important and critical levels of 10728.95 & 10813.10 intraday but could not sustain at the higher level and in the late afternoon plunged down sharply to end the day with a meagre gain of 10.85 points. It slipped into correction mode yesterday and today’s move confirmed the weakness in it and the technical indicators are also pointing towards that further fall ahead but in between up move cannot be ruled out. It has bed of support in the range of 10583.65---10553.15 and break below this range will accelerate the fall and it is likely to break this range in coming days, but to prove it otherwise it has to move above at least 10728.95 and sustain on the closing basis and finally cross the other critical point of 10813.10 & 10847.85 in next 4-5 trading session to continue the up momentum, chances of which looks slim at this point of time. Therefore it seems that in all probability the top may be in place at 10894.05 on 13.7.2020 for the time being. After breaking the aforesaid range it will find support at 10461.72---10359.59---10334.41 levels and any of these could be the possible correction completion points also, but sustained break below 10334.41 on the closing basis can take it down further, which may please be noted. 

In view of the above observation, it seems that it has topped out for now therefore for safe trades long trade should be completely avoided for the time being and can only be tried if it gives visible indication of correction completion near the possible support points mentioned above or otherwise. But aggressive traders can try long trade if it moves above 10641.05(it can change) and sustain or if it moves above 10728.95 and sustain on the closing basis or buy on decline but not below 10583.65 with a stop loss of 10540 as of now for taking advantage of a possible pullback move, it would be an aggressive trading approach, therefore it could be a risky affair at this point of time. Since the correction is on therefore it is suggested to adopt sell on the rise strategy or sell on the price breakdown as of now to take advantage of the corrective move or a possible breakdown. It is strongly suggested to avoid any kind of adventurous long trade as of now. The bias is down as of now.

Please be alert and vigilant particularly in long trade because the ongoing rally is purely liquidity driven and not backed by fundamentals, therefore possibility of ending this rally mischievously is pretty high. It has already entered into the correction mode and may reverse the trend also in coming days. 

 

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. Sell on the rise near or within the range of 10750---10850 with a stop loss of 10900. It could be a risky trade but worth trying.

Or

Sell if it moves and maintain below 10553.15 for some time with a stop loss of 10630.  

Or

Sell if it maintains below 10676 for some time with a stop loss of 10730.

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.