A TECHNICAL VIEW ON CNX--BANK NIFTY FOR—4.10.2021

 

CNX--BANK NIFTY

Open—37140---High—37299.40--Low—36876.35---Close-37225.90 on 4.10.2021.

Support:37200/36615/36525.95/36317/36248/36151.95/35531/34817.50. 

Resistance:-37315.20/37708.75/37811.95/38112.75/ 38377.25/38545/38719-743/38888/38914/39093/39695/40234/40337/40498/40680/40746/40855/41169.

(Bold and underlined figures are most important) 

It has been falling for the last 4 days and making lower highs and lower lows and also broken some of the short term moving averages after a long time and already below one important long term average, furthermore it slipped into deep short term correction mode today, therefore all together it is giving weak indication which can drag it down. Please note that if it does not bounce back and closes above 37650 (figure may change) in next 2-3 trading session then down move may continue. However even if it closes above 37231 and sustain on the closing basis then there is a chance that it could stage a relief rally and may try to come out of corrective mode also else down move should continue. Moving down its most important and solid support range or bounce back points are at 37017---36804---36541(figures may change) break below 37017 on the closing basis could be a strong warning signal for long trade and break below 36804 will weaken it further and finally sustained break below 36541 on the closing basis will potentially threaten the on-going uptrend. Please note that it could come out of the corrective mode if it closes above 37940.40 and sustain and if it moves above 38077(figure may change) and sustain on the closing basis then it could retest its all-time high of 38377.25 or may go beyond also. Moving up its target points or stiff resistance points could be at 37322.73---37537---37795.40---37852---37940.35---38112.75---38545---38666---38743---38914---39093---39340---39770---40234---40500---40680(figures may change) it could correct at any of these points before moving up again as it has been correcting on every rise for the last few days. Kindly note that moving up its most critical resistance range would be between 39150---39465---39735(figures may change); break above this range will accelerate the up momentum.

It is important to mention here that its long term technical setup is still good for the uptrend to continue. But it has slipped into deep short term correction mode; furthermore some of the very important technical indicators are giving weak signal on the daily chart which may drag it down further. So one has to be cautious and alert in the long trade at least till the indicator turn positive or it closes above 37625(figure may change) and sustain on the closing basis. I once again repeat that if it does not recover fast and move above its critical points mentioned above in next 2-3 trading sessions then down move should continue.

In view of the above observation, it is into corrective mode therefore safe traders should avoid long trade till the fall is arrested or it gives visible indication of correction completion. It would be safe to try long trade only once it closes above 37625.(this figure can change)  However, aggressive traders can try long trade if it moves above 37300 and maintain for some time or can buy on decline near 36950 but not below it. Please note that long trade in a corrective market could be a risky affair. It is in the long term uptrend but in corrective mode now and one never know how this on-going correction will culminate, therefore short trade can also be attempted on the rise and at appropriate point or can be tried on the price breakdown for taking advantage of the intraday gains.

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 37300 and maintain for some time with a stop loss of 37200. It is for the aggressive traders and could be a highly risky trade.

Or

Buy on decline near 36950 but not below it with a stop loss of 36840. It is for the aggressive traders and could be a highly risky trade.

2. Sell if it moves below 36840 and maintain for some time with a stop loss of 37050. It could be a risky trade but worth trying for intraday gains.

Or

Sell on the rise near 37625 with a stop loss of 37700. It could be a risky trade but worth trying for intraday gains.

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.