A TECHNICAL VIEW ON CNX--BANK NIFTY FOR—23.11.2021

 

CNX--BANK NIFTY

Open—38232.15---High—38241--Low—36655.40---Close—37128.80 on 22.11.2021.

Support:36876.35/36525.95/36151.95/35359.25/34817.50. 

Resistance: -37315.20/37708.75/38112.75/38377.25/38873.80/39292.80/40011.15/40160.20/41367.25/41829.60.

(Bold and underlined figures are most important) 

It opened on a positive note but could not sustain and had relentless fall and finally closed with a whopping loss of 847.45 points.  It is into medium term correction mode and break below 35761.25 will push it into long term correction mode, which may please be noted. It is below its short term moving averages on the daily and the weekly chart, almost below all of the medium term moving averages and also below some of its long term parameters on the daily chart, which is a very weak indication and if it does not bounce back sharply in next 2-3 days then the accelerated fall may continue as it did today. Moving down further its other important support points are at 36876.35---36770---36525.95 (figure may change), please note that sustained break below 36770 will put the long term uptrend in potential danger. It did break 36770 levels intraday today but bounced back nonetheless it is a bad sign and indicates further fall may be ahead.  Similarly moving up it will face stiff resistance from its critical points at 38015---38234---38457---40390---40700---41001 (figures may change) and to regain the steady up momentum again it has to move above this range and sustain, but looking at today’s severe intensity down move chances of  crossing this range is very slim at this point of time.

It is important to mention here that it is way below its correction completion point of 38796---39959.70 & 40489, furthermore it is also below its pullback threshold points of 37236---37482.55 & 37876.50 (figure may change) which is a very weak indication and if it fails to bounce back above it and sustain on the closing basis then fall may continue with in between short up move. Please note that if it moves above 37236 & 37482.55 and sustain on the closing basis then it may give a weak intensity pullback rally and if it moves above 37876.50 and sustain on the closing basis then chances are that it may give slightly better and moderately strong pullback move. But the overall short term technical setup is very weak mind you.

It is important to mention here that pullback rallies are treacherous in nature and can end abruptly, it is therefore suggested that one should be extremely alert and cautious in the long trade initiated for pullback gains. 

It is important to mention here that its long term technical setup is still o.k. for the uptrend to continue as long as it holds 36770(figure will change every day). But it got a warning signal today as this mark was breached intraday today. It is into medium term correction mode, it is below its all critical support points also as mentioned above therefore further fall cannot be ruled out if it remains below it. Furthermore please note that few important technical indicators are also weak on the daily and weekly chart and indicating that it could seek much lower levels, therefore it seems that it may have an accelerated fall in coming days/weeks, as it did today, if the technical indicators or the price pattern does not improve fast. Since it is in deep corrective mode therefore sell on the rise strategy should be adopted till visible sign of correction completion emerges. The, short term bias is hugely weak and negative.

In view of the above, it is into medium term correction mode and also below its pullback threshold points, therefore for safe traders long trade should be avoided and can only be tried if it closes at least above 37482.55 and sustain for the pullback gains. However, aggressive traders can try long trade if it moves above 37236 and maintain for some time or on decline near 36876 but not below it. I strongly 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 still in the long term uptrend but now in 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 near 36876 but not below it with a stop loss of 36800. It is for the aggressive traders and could be a highly risky trade.

Or

Buy if it moves above 37236 and maintain for some time with a stop loss of 37100. It is for the aggressive traders and could be a highly risky trade.

2. Sell on the rise near or within the range of 37500--37600 with a stop loss of 37700. It could be a highly risky trade but worth trying for intraday gains.

Or

Sell if it moves below 36876 with a stop loss of 37150. It could be a risky trade but worth trying for intraday gains.

Or

Sell if it moves below 36655 with a stop loss of 36795. 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.