A TECHNICAL VIEW ON CNX--BANK NIFTY FOR—22.3.2021

 

CNX--BANK NIFTY

Open-33590.40--High-34355.40--Low—33361—Close-34161.40 on19.3.2021

Support:33625/33361/32842.30/32718.75/31725.85/31650.90/31510.25/30945.20/30893.65/30197.85/29687.70

Resistance34430.65/34568/34658.70/34803.60/34893.25/34973/35428.15/35584.60/35648/35815.75/35884/36086/36397/36455/36466/36477/36615.20/36647/36897/37170/37284/37708.25/38286/38520.

(Bold and underlined figures are most important)

It opened on a negative note and went down further and made a low of 33361 thereafter it bounced back sharply and closed with a reasonable gain of 304.80 points. After 5 days of straight fall it got a breather today but this rise is not sufficient to take it up further so watch out for next 1-2 days trading session for clear direction. Please note that its critical and most important points for the year 2021 are 32613.10---32465.45---31297.30 & 31264.05 and it is well above these points now and as long as it hold these points on the closing basis uptrend will remain intact. Its other key points are placed at 36063.50---35815.75---35648---33625---32612.92(figures can change). It is decisively below its first 3 key points of 36063.50---35815.75  & 35648, so it is into deep short term corrective mode , which can last for 4-7 days or more, this is a very weak indication. Please note that the sustained break below 33625 will push it into medium term correction mode and it can last much longer, it did break this level intraday but bounced back at close, but it gives weak indication.  Last and most importantly sustained break below 32612.92 on the closing basis can push it into long term correction mode and can potentially threaten the uptrend also which may please be noted. 

Kindly note that even after today’s sharp recovery it is still into deep short term correction mode, the sharp rally today may be due to the short covering also and if it is so then it is likely to fizzle out in next 1-2 days and down move will continue.  But if it moves and sustain above its pullback threshold point of 34387 on the closing basis then it could continue the effort to move up further ,else down move will continue. Please note that to come out of the correction mode completely it has to moves above 36063.50&36700 and sustain on the closing basis and for a steady and sustained rise it has to move above 36840 and sustain on the closing basis then only, it can expect to retest its all-time high of 37708.75 or may go beyond. In the process of crossing the above important points it will face very tough resistance on the way at-34387---34430.65---34893.25---34976---35428.80---35648---35815.75---36063.50---36700---36840 levels, crossing these hurdles  seems  pretty tough at this point of time, therefore chances are that this rally may get exhausted at any of these points or earlier also and may start down move again. Going down its most important support point will be at 33640(medium term rising trend line, this figure will increase every day) for the day and sustained break below this level can drag it down with an accelerated pace and then other key support points would be at-33625---33361---32842.30---32613.10---32465.45---31297.30---31264.05---30996. Kindly, note that the short term technical setup is very weak. The bias is negative as of now.

In view of the above observation, in spite of good bounce back today, it is still in correction mode therefore, long trade in general should be avoided till it gives visible indication of correction completion. For safe traders it is suggested to try long trade once it closes above its pullback threshold point of 34387, however aggressive traders can try long even if it maintains above 34387 intraday for some time or on decline but not below 33640. Please note that long trade in deep corrective mode could be a risky proposition, which may be kept in mind. It is still in corrective mode therefore adopt sell on the rise strategy or sell on the price breakdown for taking advantage of the down move till clarity on correction completion emerges. Short trade should be tried but with extreme alertness and caution because the long term technical setup still seems o.k. as of now.

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(Suggested)

1. Buy if it moves and maintain above 34387 for some time with a stop loss of 34120. It is for aggressive traders and could be a highly risky trade.

Or

Buy on decline near but not below 33640 with a stop loss of 33580. It is for aggressive traders and could be a highly risky trade.  

2. Sell if it moves and maintains below 33580 for some time with a stop loss of 33680. It could be a risky trade but worth trying for intraday correction.

Or

Sell on the rise near or within the range of 34640---34740 with a stop loss of 34840. It could be a risky trade but worth trying for intraday correction.

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.