A TECHNICAL VIEW ON CNX--BANK NIFTY FOR –4.8.2020

CNX--BANK NIFTY

Open-21543.80--High-21543.80--Low-21031.45—Close-21072.10 on 3.8.2020

Support:21026.45/20926.45/20324/20122.25/20010/19507/18941/18703.45.

Resistance:21122.10/21375/21462.40/21544/21640/21807/21967/.

Critical Points moving up: 21375---21546---21640---21807.

Critical Points moving down:-21027---20926---20501---20381---20247.

(Bold and underlined figures are most important)

It is in a deep correction mode and it is terribly weak on almost all important technical parameters, therefore it seems that further fall is ahead but in between the fall short up rally cannot be ruled out. Its critical point is 21537 & 21546(it can change) and it is well below these points now, which indicates gross weakness in it. However now it is near its two critical bottoms of 21026 & 20926 and it respected these bottoms today and if it holds these levels it could stage a relief rally from here before resuming the down move again else down move shall continue. Moving down it will find support at 20501---20381---20247---20122---20010. Please note that it may gain some strength for the up move only if it move and sustain above its critical point of 21537 & 21546 on the closing basis as of now.

The correction is on but since it is near its bottom, therefore it may stage a pullback rally if it does not break the aforesaid bottoms but long trade should not be initiated to take advantage of a possible pullback rally because these rallies are treacherous and can trap the traders miserably. Long trade can only be tried once it closes above its critical points of 21537 & 21546 and sustain or after a significant decline where it gives visible indication of a bottom formation. It is apt for the present situation to adopt sell on the rise strategy or sell on the price breakdown to take advantage of the down slide.

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 if it does not moves above 21375 for some time after open with a stop loss of 21450 for a target of 21027---20926----20750.

Or

Sell on the rise near or within the range of 21580---21650 with a stop loss of 21750.  

Or

Sell if it moves and maintain below 20926 for some time with a stop loss of 21040 for a target of 20750---20500.

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.