A TECHNICAL VIEW ON CNX-NIFTY FOR –25.8.2020

 

CNX-NIFTY

 Open-11412--High-11497.25—Low-11410.65---Close-11466.45 on 24.8.2020

Support:11447/11378/1341.40/11289.80/11270/11239.80/11171.55/11111.45/11056.55/10894.05/10882.

Resistance: 11495.20/11614.50/11694.85/11706.65.

Critical Points moving down: 11460.35---11447---11341.40---11289.80---11270---11239.80---11111.45.

Critical Points moving up: -11497.25---11536----11614.50---11694.85—11706.65.

 (Bold and underlined figures are most important)

It has bounced back above the trend line and crossed the most critical point of 11447 today which is an extremely positive sign, but it still seems difficult for it to keep pace with the trend line because it is rising at a faster speed and is at 11517 for the day. However as long as it sustain above 11447 on the closing basis the relevance of the trend line may fade out a bit  and it could make an attempt to retest it’s all time high of 12430.50 made on 20.1.2020 or may go beyond also but with intermittent correction and resistance at various points on the way up. The resistances points on the way up will be at 11536---11565---11598---11626---11640---11714—11736--11798.The benchmark point for the long trade now is 11447 avoid long trade if it closes below it.  Please note that break below 11447 on the closing basis can push it into the correction mode and if it remains below it for reasonable time period then the uptrend may end also. Therefore traders have to be extremely cautious in the long trade at this point of time because no doubt it is rising but with every rise vulnerability for correction or rally exhaustion is also rising. The technical setup is good as of now.  

In view of the above observation long trade can be tried if it maintains above 11460.35 & 11447 for some time after open. It is strongly suggested to avoid trying short trade in general but it should be attempted after a reasonable rise near or within the appropriate range or on the price breakdown for taking advantage of corrective move or 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 if it maintains above 11460.35 & 11447 but not below 11447 with a stop loss of 11390.

2. Sell on the rise near or within the range of 11620---11640 with a stop loss of 11720.

Or

Sell if it falls below 11410 and maintain below it for some time with a stop loss of 11470.

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.