A TECHNICAL VIEW ON CNX--BANK NIFTY FOR –1.9.2020

 

CNX--BANK NIFTY

Open-25038.80--High-25232.60--Low-23385.30—Close-23754.3 on 31.8.2020

Support:23385.30/23211.35/23080.60/22479.85/22439.95/22418/21967.

Resistance:24364.27/24617/25232.60/25430/25725/25820/25955/26311.30.

Critical Points moving up: 24364.27---24618---24900----25236----25432----25650.   

Critical Points moving down:-24364.27---23610---23090----22730---22400.

(Bold and underlined figures are most important)

It opened with a huge up gap and went further up then plunged down sharply and went below the low of the previous day but managed to close above the previous day’s low which is still a very weak sign and in technical parlance today’s price pattern is called downward reversal although it was not in copy book fashion but still it is very bad sign. Furthermore it is well below its critical point of 24364.27. Therefore in totality today’s move was a massive jolt to the ongoing uptrend and a potential threat for the end of the trend, so it has to be seen how it pans out in next 2-3 days and for the uptrend to continue it has to maintain above its recent critical points of 23610---23090---22732---22400(figures will change every day) and sustain on the closing basis else down move may continue. Moving down it may find good support at 22169----22022----21870---21250---21031---20926 sustained break below 22169 can drag it down further and sustained break below 20926 may accelerate the fall. Similarly moving up it will face stiff resistance at 24364.27---24527----24800---24865---25200. But looking at today’s price movement further down slide seems a distinct possibility.

In view of the above observation, it is suggested to avoid long trade completely for the day. In light of today move it is strongly suggested to attempt short trade after a reasonable rise near or within the appropriate range or on the price breakdown for taking advantage of corrective move or for taking advantage of rally breakdown. 

I have been apprehending this fall for quite some time ,therefore I have been writing a caution note in the last  paragraph of my almost all the articles published recently and it is still there.

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. Sell on the rise near or within the range of 24365---24550 with a stop loss of 24650. It could be a risky trade but worth trying.

Or

Sell if it moves below 23385 and maintain for some time with a stop loss of 23485. 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.