A TECHNICAL VIEW ON CNX-NIFTY FOR –20.8.2020

 

CNX-NIFTY

 Open-11452.15--High-11460.35—Low-11394.10---Close-11408.40 on 19.8.2020

Support:11378/11341.40/11270/11239.80/11171.55/11111.45/11056.55/10894.05/10882..

Resistance: 11447/11495.20/11614.50/11694.85/11706.65/11760.20/11832.30/11856.15..

Critical Points moving down: -11378---11341.40---11270---11239.80.

Critical Points moving up: -11447---11474----11536---11626---11798.

 (Bold and underlined figures are most important)

It did cross the immediate last hurdle of 11447 intraday but could not close above it, please note that the sustained close above 11447 mark may take it to higher levels and then it could retest its all time high of 12430.50 or may go beyond off course with intermittent corrections. Moving up it will face resistance at 11474---11536----11626---11800. Similarly moving down the critical points would be 11378---11341.40---11320 and the key point for the day is 11320, so close below it may not be good for the continuation of the ongoing up move. Furthermore it has retraced more than 80% of the total fall which started from the top 12430.50 and ended at 7511.10 therefore it is highly vulnerable for correction also and if it does not move and maintain above 11447 on the closing basis in next 2-3 days then correction could set in. The overall technical setup is good as of now ,but be watchful.

In view of the above observation long call can be tried on decline at appropriate points but not below 11320 or can be tried if it moves above 11447 and sustain for some time. Short trade should be avoided in general for the day but can be attempted after a reasonable rise for taking advantage of possible 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 dont have reasonable profit margin in the trade. Day squaring off is strongly suggested in any case.

TRADING STRATEGY

1. Buy on decline at the appropriate points but not below 11320 with a stop loss of 11260.

Or

Buy if it moves and maintains above 11447 for some time with a stop loss of 11370.

2. Sell on the rise near or within the range of 11490---11540 with a stop loss of 11580.It could be a risky trade but worth trying.

Or

Sell if it falls below 11320 and maintain below it for some time with a stop loss of 11385. 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.