A TECHNICAL VIEW ON CNX--BANK NIFTY FOR---7.12.2020

 

CNX--BANK NIFTY

Open-29573.40--High-30162.30--Low—29473.50—Close-30052.40 on 4.12.2020

Support:29784.75/29612.55/29435.05/29314/29156.25/29030.90/28923.10/28580.90/27754.45/27589/27164/26950/26545.70/26492/26408/26311.30/25953.50/25891/25723.55/25426.75.

Resistance:30197.85/30220/30545/30649/30801/30899/30996/31649.45.

(Bold and underlined figures are most important)

After two days of lull it showed strength and bounced back sharply today and moved decisively above its key points also, which is a positive indication for the up move to continue. 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 and other key points which a very positive sign. Please note that sustained break below 29816.25 & 29609 can push it into very short correction, 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 bias as of now is on the upside.

The overall technical setup is still looking good for the up move to continue but one should be very careful with the all around extra ordinary exuberance displayed by the market for some time now, because certain technical indicators are showing distinct negative divergence despite sustained up move, 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 well above it all, therefore it may take some time for divergence to happen in reality or it may fade out also with positive divergence in coming days.  But the divergence is so strong till 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 29942---29923---29816.25---29609---29314---29030.90---28923---28643.75---28292---28202---28119---27703.

Moving up its critical resistance points at 30197.85---30545---30685---30985—31180----31649.

In view of the above observation long trade can be tried on decline at appropriate points or near 29816 but not below it or if it maintains above 30163 for some time. It seems that it has regained the up momentum again, but some technical indicators are also showing negative divergence since long 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 in the appropriate price range 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 29816 but not below it with a stop loss of 29700.It is for aggressive traders and could be a highly risky trade.  

Or

Buy if it moves and maintains above 30163 for some time with a stop loss of 30040. It is for aggressive traders and could be a highly risky trade. 

2. Sell on the rise near or within the range of 30600—30700 with a stop loss of 30800. It could be a risky trade but worth trying for intraday corrective move.

Or

Sell if it moves and maintains below 29700 for some time with a stop loss of 29825. 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.