A TECHNICAL VIEW ON CNX--BANK NIFTY FOR—4.8.2021

 

CNX--BANK NIFTY

Open-34660.75---High-35238.45--Low—34649.20---Close-35207.45 on 3.8.2021

Support:34976/34930/34859.90/34663/34635.95/34555/34525.45/34410/34374/34357.35/34322/34287/34115.20/33908.95/33625/33371/33306.80/32842.30/32613.10/32465.45/32415.15/32347/32157.05/32130/31783.60/31661/31649.49/31297.30/31264.05. 

Resistance;35380/35428.15/35491.95/35584.30/35648/35811/35985.25/36248/36455.15/36497/36615/37232/37708.75.

(Bold and underlined figures are most important) 

It continued the up move today and closed with a good gain of 497.45 points. But it is still into very short term corrective mode but it has bounced back above its short and medium term moving averages, which is a positive sign. Please note that it will get out of corrective mode only if it moves above 35495.25 and sustain on the closing basis else down move may resume again. Going down it has bed of supports in the range of 34525---34410---34374---34322---34157---33908, therefore till it holds this range there is no fear of sharp and consistent decline. It is important to mention here that it has to move above the range of 35648---35811---35980---36248 for a steady and strong up momentum, if it moves above 36248 and sustain on the closing basis then it could possibly retest it’s all time high of 37708.75 or may go beyond also, chances of happening this seems very bleak at this point of time. Please note that its broad range as of now is between 36248---33908. Therefore it is suggested to play the range with the help of above mentioned in between support and resistance levels till either side breakout happens.

The long term bias still looks positive for the uptrend to continue. The short term outlook has improved a bit but still not out of woods,  furthermore one very important technical indicator on the daily and weekly chart is still showing weakness and indicates that it could drag it down again in coming days if it does not improve. So watch out and be cautious and careful particularly in the long trade till technical indicator comes into positive mode.

In view of the above observation, since it into very short term correction mode, therefore it is suggested to avoid long trade in general till it gives visible indication of correction completion. But looking at today’s move long trade can be tried if it moves above 35240 and maintain for some time or on decline at appropriate points  or near 34650 but not below it. Since it has not yet crossed some of its critical long term averages and overall technical setup is showing weakness, therefore short trade can also be tried after reasonable rise or can be tried on the price breakdown for taking advantage of the intraday or otherwise 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 (Suggested)

1. Buy if it moves above 35240 and maintain for some time with a stop loss of 35160.It is for both the traders and could be a risky trade.

Or

Buy on decline at appropriate points or near 34650 but not below it with a stop loss 34500. It is for both the traders and could be a highly risky trade.

2. Sell on the rise near or within the range of 35650---35800 with a stop loss of 35875. It could be a risky trade but worth trying.

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.