A TECHNICAL VIEW ON CNX--BANK NIFTY FOR –24.8.2020

 

CNX--BANK NIFTY

Open-22190.70--High-22344.05--Low-22165.05—Close-22299.60 on 21.8.2020

Support:22232.19/21967/21807.40/21768/21611.40/21462.40/21459/21370/21122.10/21026/20926.

Resistance:22340/22418/22439.95/22479.85/23080.60/23211.35.

Critical Points moving up: 22340---22418---22479.85---22511---22835---23080.

Critical Points moving down:-22232.19---21900---21791---21606---21536---21359---21026----20926.

(Bold and underlined figures are most important)

It bounced back and closed higher today but still below its critical and important points of 22418---22479.85--22511(this figure will change daily) & 22775, it can expect smooth upside movement only once it crosses these points and sustain above it on the closing basis. Similarly sustained break below 21880 on the closing basis will signal that it could slip into correction and sustained break below 21537 will confirm that it has slipped into deep correction, and then it will find very strong support in the range of 21026—20926 only, which may please be noted.

In view of the above observation long trade should be completely avoided for the day and can only be attempted once it moves above 22418 & 22511(this figure will change daily) and sustain on the closing basis or on the significant decline near 21537 but not below it or near or within the range of 21026—20926 but not below 20926. It is strongly suggested to try short trade for the day as it seems that correction may set in. So traders can try short trade on the rise at appropriate price or in a price range for taking advantage of corrective move or on the price breakdown for taking possible rally exhaustion advantage.

It is imperative to mention here that the ongoing surge in the Indian as well in the rest of the world stock market for the last few months is not at all fundamentally backed but purely liquidity driven which is concerning. In light of this instead of caution it seems that there is an irrational exuberance in the stock market now which is even more concerning. Please take my word that at this juncture if investors and traders do not exercise extreme caution and alertness particularly in the long trade then they are surely going to be trapped in coming days. One cannot time the correction but it seems that it is around the corner. 

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 on decline near but not below 21537 if it holds this level for some time with a stop loss of 21450. It could be a risky trade today.

Or

Buy on decline near or within the range of 21026—20926 but not below 20926 with a stop loss of 20830. It could be a risky trade but worth trying.

2. Sell on the rise near or within the range of 22450---22550 with a stop loss of 22625. It could be a risky trade but worth trying.

Or

Sell if it moves below 21880 and maintain for some time with a stop loss of 22050.

Or

Sell if it moves below 22150 and maintain for some time with a stop loss of 22350. It could be a risky trade but worth trying.

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.