A TECHNICAL VIEW ON CNX-NIFTY FOR—18.12.2020

 

CNX-NIFTY

 Open—13713.55--High—13773.25—Low—13673.55---Close-13740.70 on 17.12.2020.

Support:13721/13650/13611/13549/13435.45/13418/13399.30/13242/13145.85/12963/12790.40/12730.25/12607.70/12430.50/12293.90/12286.45/12246.70/12158.80/12025.45/11929.60/11802.65/11794.25/11614.50/11535.45.                                                                                                                                                           

Resistance:  13768/13943/14034/14055/14095/14170/14296/14310.

 (Bold and underlined figures are most important)

It is showing robust strength and making new high every day. Please note that the gap it created on 16.12.2020 is still there and if it makes an effort to fill the gap in next 2-3 days, which is technically possible then it can come down to 13589.65. But it is well above its most critical and important points which are placed at 13595--12881 & 12734 for 18.12.2020(figures can change every day) and also well above other key points which are at 13541.30---13527---13245.13---13069.25---12430.5---12295.38(except for 12430.50 other figures can change) which is a positive sign for the up move to continue. Please note that sustained break below 13541.30 & 13527 can push it into very short correction, sustained break below 13245.13 on the closing basis will push it into short term correction mode, sustained break below 13069.25 will push it into medium term correction mode, sustained break below 12430.50 will indicate that it could lose steam for continuation of the up move and most importantly sustained break below 12295.38 on the closing basis can push it into long term correction mode and will potentially threaten the uptrend also, which may please be noted. It is important to mention here that sustained break below its most critical and important points of 13595---12881 & 12734 on the closing basis could be an indication of a big fall ahead.

The overall technical setup is looking strong for the up move to continue, the negative divergence has faded out again which is a positive sign. It went past its first targeted topping out point of 13769 intraday but settled down below it at the close. In view of this it is suggested to be careful in long trade from now on. The overall bias as of now is on the upside.  

It is important to mention here that it did cross the first targeted top out point of 13768 but closed below it, but if it moves above 13768 and sustain on the closing basis then the next possible strong top out range could be 13913---13943---14055---14095---14170---14310 (first four figures will change every day) which may please be noted. The technical setup is very strong for the continuation of the up move but since it has entered the tough territory, so there is a strong possibility that it can correct also and the correction could be moderate to reasonably sharp. Therefore I once again reiterate that traders should be extra alert and cautious in the long trade henceforth.

Moving down its critical support points at 13721---13650---13611---13600---13541.30---13527---13478.30---13399.30---13281---13245.13---13145.75---13069.25---12986---12918---12809---12790---12730---12709.05---12607.70---12566---12430.50.---12295.38.

Moving up its critical resistance points at 13769---13791---13913---13943---14055---14095---14170---14310.

In view of the above observation, it is suggested to try long trade if it moves and maintains above 13775 for some time or can buy on decline at appropriate points or near but not below 13541. It is in strong up momentum therefore short trade in general should be avoided, but since it has entered a tough range therefore short trade can also be attempted on the rise at the appropriate price range or on the price breakdown for taking advantage of the intraday 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 if it moves and maintain above 13775 for some time with a stop loss of 13730.

Or

Buy on decline at appropriate point or near 13541 but not below it with a stop loss of 13470. It could be a risky trade

2. Sell on the rise near or within the range of 13830---13870 with a stop loss of 13900. It could be a risky trade but worth trying for intraday gain. Square off the trade in any case before the day ends, but can be carried forward if the trade is in substantial profit else not.

Or

Sell if it moves and maintains below 13520 for some time with a stop loss of 13560. It could be a highly risky trade but worth trying for intraday correction.

Or

Sell if it does not move above 13775 even in intraday in first one and half hour of trade with a stop loss of 13800. It could be a risky trade.

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.