A TECHNICAL VIEW ON CNX-NIFTY FOR –1.9.2020

 

CNX-NIFTY

 Open-11777.55---High-11794.25—Low-11325.85---Close-11387.50, on 31.8.2020.

Support:11614.50/11540/11495.20/11373.60/1341.40/11289.80/11111.45/11056.55/10882.25.

Resistance: 11447/ 11460.35/11614.50/11686.05/11694.85/11736/11761/11794.25.

Critical Points moving down: 11372.28---11289.80---11270---11248.01---11111.45.

Critical Points moving up: -11447—11634---11675---11761---11794.25.

(Bold and underlined figures are most important)

It opened with an up gap and went further up then plunged down sharply and closed decisively below the previous day’s low which is a very weak sign and in technical parlance today’s price pattern is called downward reversal, furthermore it has broken its major rising trend line decisively and also below its benchmark point of 11447 which is an extremely bad sign. 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 move above 11447 and sustain on the closing basis else down move may continue. Moving down it may find good support at 11289.80---11248---11111.45---11020---10882, sustained break below 11248 can drag it down further and sustained break below 10882 may accelerate the fall. Similarly moving up it will face stiff resistance at 11447----11543---11634---11675----11794.25---11830. But looking at today’s price movement further down slide seems a distinct possibility.

In view of the above observation, for safe traders it is suggested to avoid long trade for the day, however aggressive trader can still try long trade for a possible pullback move if it moves above 11447 and sustain for some time but it could be a risky trade mind you. 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. Buy if it moves and maintain 11447 with a stop loss of 11400, for aggressive traders only. It could be a highly risky trade.

2. Sell on the rise near or within the range of 11540--11634 with a stop loss of 11680. It could be a risky trade, but worth trying.

Or

Sell if it maintains below 11410 with a stop loss of 11465.

Or

Sell if it falls below 11325 and maintain below it for some time with a stop loss of 11390.

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.