A TECHNICAL VIEW ON CNX--BANK NIFTY FOR—28.10.2021

 

CNX--BANK NIFTY

Open—41234.55---High—41347--Low—40750---Close—40874.35 on 27.10.2021.

Support:40855/40680/40498/40291/40011.15/39292.80/38377.25/38112.75/37708.75/37315.20/36876.35. 

Resistance: -41173/41811/41830/41965/42036/42222/42808/43050/43248/45178.

(Bold and underlined figures are most important)

It opened on a flat note and moved in a very short range for a long time but finally closed below its first critical point of 41231 with a loss of 363.95 points. It has slipped into very short term correction mode today which is concerning and if it remains below it down move may accelerate. However as long as it holds its most critical support range of 40483—40211---39907(figure will increase every day) it seems that there is no major threat to the on-going up move and it may continue it off course with intermittent corrections. Moving up from here it will face resistance at 41811---41830---41965---42036---42222---42808---43050, it could correct from any of these points and then may resume the up move again or may break down also which may be kept in mind. Similarly moving down its critical support points could be at 40661---40578---40490---40175---40009---39960 (figure may change), it may bounce back from any of these points,  it has slipped into very short term correction mode today, break below the range of 40661---40578---40490 will push it into short term correction mode, break below 40175 will weaken it further and sustained break 39960 will push it into deep short term correction mode, which may please be noted. 

It is important to mention here that its long term technical setup is strong and good for the uptrend to continue. The short term bias is also positive as of now. Furthermore except for one other important technical indicator is also positive as of now, so it may continue the up move with an accelerated pace in coming days with in between down correction.  But I would like to caution here that although it is on a very sound technical footing as of now and further rise is indicated, but with every rise in it the risk element is also increasing, so be alert and careful in your long commitment henceforth.

In view of the above, since it slipped into correction mode therefore safe traders can try long trade only if it closes above 41240 or if it gives visible indication of correction completion at the lower levels. However, aggressive traders can try long trade on decline at appropriate points or near the range of 40661---40578---40490 but not below it for pullback gains. Please note that long trade in a corrective mode could be a risky affair, therefore one should be extremely cautious and alert in the long trade at this point of time.   It is in the long term uptrend but in correction mode now, 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. Please be extra alert in the short trade because it is in strong uptrend.

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 at appropriate points or near or within the range of 40661---40578---40490 but not below it with a stop loss of 40200. It is for the aggressive traders and could be a risky trade.

2. Sell near if it does not move above 41240 in first one and half hour of trade with a stop loss of 41400. It could be a highly risky trade but worth trying for intraday gains.

Or

Sell if it moves below 40250 and maintain for some time with a stop loss of 40500. It could be a risky trade but worth trying for intraday gains.

Or

Sell if it moves below 40750 and maintain for some time with a stop loss of 40900. It is for the aggressive traders and 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.