A TECHNICAL VIEW ON CNX-NIFTY FOR –5.10.2020

 

CNX-NIFTY

 Open—11364.45--High—11428.60—Low—11347.05---Close-11416.95 on 1.10.2020.

Support:11373.60/11341.40/11270/11185/11111.45/11090/11056/10882/10790.20.                     

Resistance: 11447/11460.35/11490.75/11568.90/11584.90/11618.10/11633.30/11761.

Critical Points moving down: 11270—11181---11111---11089---10985---11882--10783.43.

Critical Points moving up: -11447—11557---11597.

(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 moves and sustain above the important benchmark point of 11447 on the closing basis, else it may fizzle out. Moving up it may face stiff resistance at 11557---11597 levels and if it moves and sustain above 11597 on the closing basis then it could retest or go beyond its recent high of 11794.25 off course with intermittent correction, which may please be noted. Similarly if this rally exhaust here then moving down it will find support at 11270---11181---11109---11034---10985---10917 levels and sustained break below 11270 may push it into good corrective mode. The overall technical setup is good and 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 11447 else avoid.  

In view of the above observation long trade should only be tried if it moves and maintain above 11447 but aggressive traders can try long trade on decline also but not below 11270, 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 maintain above 11447 for some time with a stop loss of 11400.

Or

Buy on decline near but not below 11270 with a stop loss of 11220. It could be a risky trade.

2. Sell on the rise near or within the range of 11560---11600 with a stop loss of 11640. It could be a risky trade but worth trying.

Or

Sell near if it does not move above 11447 even intraday in first two hours of trade with a stop loss of 11480. It could be a risky trade but worth trying.

Or

Sell if it falls below 11220 and maintain for some time with a stop loss of 11280.

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.