A TECHNICAL VIEW ON CNX--BANK NIFTY FOR—29.10.2021

 

CNX--BANK NIFTY

Open—40915.15---High—40931.05--Low—39350.20---Close—39508.95 on 28.10.2021.

Support:39292.80/38377.25/38112.75/37315/36876.35/36525/36151. 

Resistance: -40011.15/41231/41367.25/41829.60/41965/42036/42222/42808/43050/43248/45178.

(Bold and underlined figures are most important) 

It opened on a flat to positive note but could not sustain and plunged down sharply to close with a whopping loss of 1365.40 points. It has slipped into deep short term correction mode today. Furthermore it has decisively broken its first lair of critical support range of 40537—40247---39938(figure will change every day) which is highly concerning and therefore further fall from here looks inevitable off course in between short relief rallies. Please note that it will regain up momentum only if it closes above this range and sustain. Its second lair of critical support range is 37987---37766---37522(figure will change every day), it may bounce back from any of these points but sustained break below the range will put the on-going uptrend in jeopardy and it may witness an accelerated fall. Moving down further its other important support points are at 36876.35---36525.95---36292(figure may change), please note that sustained break below 36292 will put the long term uptrend in potential danger. It is important to mention here that it could come out of corrective mode if it closes above 41231 and sustain, but if it moves above 39936 (figure may change)and sustain on the closing basis then it may  stage a pullback rally again, else down move may continue with in between short up move. However moving up its critical resistance points could be at 39936---40011.15---40247---40537---41367.25---41830(figures may change) and it could react from any of these points and then may move up again or may break down also which may please be noted. Kindly note that now it is a sell on the rise markets till visible sign of correction completion emerges. 

It is important to mention here that its long term technical setup still looks good for the uptrend to continue as long as it holds 36292(figure will change every day).  But it has slipped into deep short term correction mode today and broken other critical points also which indicates terrible weakness, therefore further fall cannot be ruled out. There was huge price destruction today but despite that except for one other important technical indicator are  still positive as of now, so watch out. Since it is in corrective mode therefore sell on the rise strategy should be adopted till visible sign of correction completion emerges. It is suggested to avoid long trade as of now.

In view of the above, it is into deep short term correction mode therefore safe traders can try long trade only if it closes above its critical points of 39936 or 41231 or if it gives visible indication of correction completion at the lower levels. It is suggested to avoid long trade now. However, aggressive traders can try long trade if it holds 39292 for some time or can buy on decline near or within the range of 37987---37766---37522 but not below it. I caution here that long trade in a corrective mode could be a highly risky affair; therefore one should be extremely cautious in the long trade at this point of time.  It is in the long term uptrend but now in deep correction mode, therefore short trade can 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 on decline at appropriate points or near or within the range of 37987---37766---37522 but not below it with a stop loss of 37350. It is for the aggressive traders and could be a highly risky trade.

Or

Buy if it holds 39292 for some time with a stop loss of 39150. It is for the aggressive traders and could be a highly risky trade.

2. Sell on the rise near or within the range 40100---40200 with a stop loss of 40350. It could be a highly risky trade but worth trying for intraday gains.

Or

Sell if it moves below 39292 and maintain for some time with a stop loss of 39550. 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.