A TECHNICAL VIEW ON CNX--BANK NIFTY FOR—20.4.2021

 

CNX--BANK NIFTY

Open-30993.45--High-31304.30--Low—30405.65--Close-31208.40 on 19.4.2021

Support:30870/30669/30648/30520/30338.35/30220.20/29687.70/29612.55/29156/28976.75/28525.45/28388.65/27652/26641—560/26441/25598.

Resistance;31264.05/31297.30/31649.49/31661/31783.60/32157.05/32347.20/32415.15/32465.45/32613.10/32842.30/33306.80/33990.80/34360/34430/34658.70.

(Bold and underlined figures are most important)

It opened with a huge down gap and went down further and made a low of 30405.65 for the day and it ended the day with a loss of 769.05 points. It is important to note here that if it makes an effort to fill this gap in next 3-4 days which is technically possible then it could come up to 31912 level, but since it is already into long term correction mode for quite some time, therefore it may give some rise from here but filling the complete gap looks less likely. Its critical and most important points for the year 2021 are placed at- 32613.10---32465.45---31297.30 & 31264.05 and it is below all these points now which is a weak sign, furthermore it is way below all its other key points which are placed at-36063.50---35815.75---35648---33625---32612.92(figures can change) which is hugely negative sign. Please note that it slipped into long term correction mode on 9-4-2021 and it could only come out of it if it moves above 32613.10 and sustain on the closing basis else it will drift downward in coming days and down move could be very painful price-wise and time wise both and most importantly it can potentially threaten the long term uptrend, which may please be noted. 

It is into long term correction mode. It is well below its short and medium term moving averages on daily and weekly chart which indicate extreme weakness, furthermore it is below some of its long term averages and other parameters and some technical indicators are showing very weak sign on the weekly chart also and most importantly it has decisively broken its long term rising trend line way back on 24-3-2021, which indicates even greater weakness therefore  further fall looks inevitable but with intermittent short relief rallies in coming days and provided it sustains below 32613.10 and 31264 on the closing basis. Please note that its pullback threshold point is now at 32130(figure can change) and it is way below it now, but if it moves above it and sustain on the closing basis then only it could give moderate to reasonable up move else it will drift down again. Going up it will face resistance at-31264---31297.30---31650---31757---32141---32330---32415.15---32465---32613.10---32842.30---33303.90---33455.50---33588---33625---33991---34268---34438---34658.70---35062---35687---35815.75---36460---36650levels. Please note that if it remains below 32613.10 & 31264 on the closing basis then it is very likely to hit 29000---28000 levels or much below it on the downside in coming days. I once again reiterate that it has to move above 32613.10 and sustain on the closing basis to give positive indication and to keep the hope alive for resumption of strong up momentum again else down move will continue with in between short relief rallies. Going down it can find support at-31030---30520---30220---29687.7---29612.55---29156---28976.75---28525.45---28388---27652. Kindly, note that the short term technical setup and parameters are tremendously weak. So short term bias is hugely negative as of now, but it is still holding up the long term uptrend somehow with a very thin margin, so it has to be watched for next couple of days to judge the long term direction.

In view of the above observation, it is into long term correction mode, therefore for safe trader or otherwise long trade in general should be avoided till it gives visible indication of correction completion. It is suggested to try long trade only once it closes above 31300 & 32130(pullback threshold point) and sustain. But the aggressive traders can try long trade if it moves above 31300 and maintain for some time or buy on decline near 30800 but not below it. Please note that long trade in long term corrective mode could be a very risky proposition, particularly buying on decline. Since it is into long term corrective mode therefore it is suggested to 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.

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 on decline near 30800 but not below it with a stop loss of 30650. It for aggressive traders and could be a highly risky trade.  

Or

Buy if it moves and sustain above 31300 for some time with a stop loss of 31150. It for aggressive traders and could be a risky trade.   

2. Sell on the rise near or within the range of 31880---31980 with a stop loss of 32120. It could be a risky trade but worth trying for intraday gain in weak market.

Or

Sell if it maintains below 31264 for some time with a stop loss of 31400. It could be a risky trade but worth trying for intraday gain in weak market.

Or

Sell if it moves below 30800 and sustain for some time with a stop loss of 31050. It could be a risky trade but worth trying for intraday gain in weak market.

 

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.