A TECHNICAL VIEW ON CNX--BANK NIFTY FOR—6.10.2021

 

CNX--BANK NIFTY

Open—37499.80---High—37786.60--Low—37364.75---Close-37741 on 5.10.2021.

Support:37708.75/37315.20/37200/36615/36525.95/36317/36248/36151.95/35531/34817.50. 

Resistance:- 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 continued the up move today and closed with a gain of 161.35 points. But it is still into corrective mode, however if it maintains above 37231 on the closing basis then there is a chance that it may make an effort to come out of the corrective mode. Please note that it will be out of corrective mode if it closes above 37940.40 and sustain and if it moves above 38077 and sustain on the closing basis then it could retest its all-time high of 38377.25 or may go beyond it also. Moving up to 38077 from here it will face stiff resistance at 37809---37852---37940.40---38024---38077 and it could react from any of these points which may please be noted. Similarly moving down its critical support points could be at 37627---37537---37450---37322.73---37231---37061---36600---36525.95(figure may change), it may bounce back from any of these points but break below 37231 will be an alert point, break below 37061 will weaken it, break below 36600 will indicate that the on-going uptrend may be in jeopardy and sustained break below 36525.95 on the closing basis may accelerate the fall.  

It is important to mention here that its long term technical setup is still good for the uptrend to continue. Despite today’s recovery it is still into corrective mode, furthermore certain important technical indicators are giving weak signal on the daily chart which may drag it down, so one has to be cautious and alert in the long trade at least till the indicators turn positive or if it closes above 38077(figure may change) and sustain on the closing basis.

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 38077(this figure can change). However, aggressive traders can try long trade if it moves above 37790 and maintain for some time or buy on decline at appropriate points or near 37231 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, it is in pullback mode now but 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 37790 and maintain for some time with a stop loss of 37600. It is for the aggressive traders and could be a highly risky trade.

Or

Buy on decline at appropriate points or near 37231 but not below it with a stop loss of 37000. It is for the aggressive traders and could be a highly risky trade.

2. Sell if it moves below 37230 and maintain for some time with a stop loss of 37470. It could be a risky trade but worth trying for intraday gains.

Or

Sell on the rise near or within the range of 37980---38080 with a stop loss of 38150. 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.