A TECHNICAL VIEW ON CNX--BANK NIFTY FOR—5.10.2020

 

CNX--BANK NIFTY

Open-21685.25--High-22293.75--Low-21664.15—Close-22246 on 1.10.2020

Support:22122/22028.15/21967/21886.70/21768/21462/21403.15/21128/21027/20926/20404. .

Resistance:22293.75/22439.95/22479.55/22757.30/23080.40/23211.35.

Critical Points moving up: 22286---22418---22818---23388---24094.          

Critical Points moving down:-22181---22018---21866---21847---21544.

(Bold and underlined figures are most important)

The ongoing pullback rally was expected to last for 4 days at max (see my post for 28.9.2020), it completed 4 days on 1.10.2020 but it gave no sign of weakness in fact it exhibited tremendous strength and closed near the high of the day, which indicate that this rally could further extend provided it hold its critical points of 22181 & 21866 (the figure will change every day) on the downside and moves and sustain above its important  point of 22418 on the closing basis, else it may fizzle out. Moving up it may face stiff resistance at 22286---22418---22818---23388---24094---24365 levels and if it moves and sustain above 22418 on the closing basis then it could open the upside up to 24365 which may please be noted. Similarly if this rally exhaust here then moving down it will find support at 22018---21847---21711---21572---21403---21349----21126---20850---20782 levels and sustained break below 21847 may push it into good corrective mode. The overall technical setup is improving therefore further up move cannot be ruled out but as you are well aware that the pullback rallies are treacherous in nature and often ends abruptly trapping the traders on the wrong foot, therefore to be on the safe side fresh long trade should only be initiated if it moves and sustain above 22418 else avoid. 

In view of the above observation long trade should only be tried if it moves and maintain above 22418 but aggressive traders can try long trade on decline also but not below 21866(this figure will change every day), but it could be a risky trade mind you. Although it has not given any sign of weakness as yet but chances of this rally exhaustion also cannot be ruled out at this point of time, therefore short trade should also be attempted on the rise in the appropriate range or on the price breakdown for taking advantage of the down move.

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 sustain above 22418 for some time with a stop loss of 22270. It could be highly risky trade.

Or

Buy on decline near but not below 21866 with a stop loss of 21700

2. Sell on the rise near or within the range of 22600---22725 with a stop loss of 22825. It could be a risky trade but worth trying.

Or

Sell near if it does not move above 22418 even intraday in first two hours of trade with a stop loss of 22500. It could be a risky trade but worth trying.

Or

Sell if it moves below 21860 and maintain for some time with a stop loss of 21980.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.