A TECHNICAL VIEW ON CNX--BANK NIFTY FOR---4.12.2020

 

CNX--BANK NIFTY

Open-29728.90--High-29813--Low—29379.40—Close-29448.75 on 3.12.2020

Support:29435.05/29314/29156.25/29030.90/28923.10/28580.90/27754.45/27589/27164/26950/26545.70/26492/26408/26311.30/25953.50/25891/25723.55/25426.75/25232.60/25199/25105.35/24823.60/24617.15/24364.

Resistance:29612.55/29784.75/30121.75/30197.85/30220/30649/30801/30899/30996/31649.45.

(Bold and underlined figures are most important)

It opened on a firm note and went further high but finally closed with a small loss of 14.40 points. Its benchmark point is 29314 and other key points are at 29816.25---29609---28643.75---27886.70---26874.60(figures can change). It is well above its benchmark point of 29314  but it is still below its  1^st & 2^nd key points  so it in into very short correction now and if it does not bounce back above these points at the earliest the down move may deepen, sustained break below 28643.75 on the closing basis will push it into short term correction mode, sustained break below 27886.70 will push it into medium term correction mode and most importantly sustained break below 26874.60 on the closing basis can push it into long term correction mode and will potentially threaten the uptrend also, which may please be noted.

The overall technical setup is still o.k. but it has made lower top of 29919.75 on the bar chart which is slightly concerning therefore for the up move to continue it has to hold 29314 mark and eventually move above 29919.75 and sustain on the closing basis else it may correct. Furthermore certain technical indicators are also showing distinct negative divergence in it, which is haunting and if it comes into play then it could witness sharp fall and then correction may last for some time. Please note that divergence will come into play only once its short term averages are broken and at present it is still above majority of it but giving whip saw around few averages and also broken one or two, therefore it may take some more time to break the complete set of short term averages for divergence to happen in reality or it may fade out also with positive divergence in coming days. But the divergence is so strong as of now therefore it is likely to happen and in that case it can come down to 28278 or below as of now, so watch out. Therefore in light of this it is advised that one should be very alert and cautious in the long trade henceforth.

Moving down its critical support points at 29314---29030.90---28923---28643.75---28292---28202---28119---27703.

Moving up its critical resistance points at 29609---29816.25---29942---30197.85---30220---30649---30801---30899---30996---31649.

In view of the above observation safe traders should avoid long trade for the day and should try only once it closes above 29919.75, but aggressive traders can try long trade on decline at appropriate points or near 29196 but not below it or if it maintains above 29609 for some time. It is showing weakness for the last two days therefore long trade could be a risky affair. Since it has gotten into very short correction again and some technical indicators are also showing negative divergence which is pointing that it may seek lower levels in coming days if divergence comes into play, therefore in light of this short trade can also be attempted after a reasonable rise or on the price breakdown for taking advantage of the corrective 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 on decline at appropriate points or near 29196 but not below it with a stop loss of 29100.It is for aggressive traders and could be a highly risky trade.  

Or

Buy if it moves and maintains above 29609 for some time with a stop loss of 29480. It is for aggressive traders and could be a highly risky trade. 

2. Sell on the rise near or within the range of 29890—29950 with a stop loss of 30050. It could be a risky trade but worth trying for intraday corrective move.

Or

Sell if it moves and maintains below 29100 for some time with a stop loss of 29210. It could be a highly risky trade but worth trying for corrective move.

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 favorable  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.