A TECHNICAL VIEW ON CNX--BANK NIFTY FOR—3.12.2021

 

CNX--BANK NIFTY

Open—36281.85---High—36563.50--Low—36166.70---Close—36508.25 on 2.12.2021.

Support:36151.95/35977.97/35810.90/35531.35/35359.25/35327.90/34817.50/34115/33908/33273.95. 

Resistance: -36525.95/36647/36655.40/36876.35/37140/37232.20/37708.75/37891/38112.75/38377.25/38426/38932.45/39117.15/39292.80/40011.15/40160.20/41367.25/41829.60.

(Bold and underlined figures are most important) 

It opened on a negative note and then stabilized and closed with a gain of 143.35 points.  It has moved above its long term correction threshold point of 35761.25 today, above 3 pullback threshold points, which is a positive sign, but it is still below its important pullback threshold point of 36862.50 and long term upholding point of 36850 till it moves above both these points and sustain on the closing basis it may not have a good pullback move and sustained break below 35933 may end the pullback chances. Furthermore it is still into medium term correction mode. It is below its short term moving averages on the daily and the weekly chart, below all its medium term moving averages and also below some of its long term important parameters on the daily chart, which is a very weak indication and if it does not bounce back sharply and move above at least some of the key points in shortest possible time then the fall may continue. Moving down further its other important support points are at 36151.95---35359.25---35327.90---35026---34817.50---34115---33908 (figure may change), please note that it is decisively below its long term uptrend upholding point of 36850(figure will change every day)  which is very concerning and if it does not bounce back above it long term uptrend will be in potential danger, furthermore sustained break below 35026(figure will change every day) may end the long term up trend and it may get into bear market. Similarly moving up it will face stiff resistance from its critical points at 36525.95---36876.35---37477---37591---37871---37988---38242---38494---40412---40721---41034 (figures may change) and to regain the steady up momentum again it has to move above this range and sustain, chances of which is pretty weak at this point of time.

The overall short term technical setup is terribly weak and long term uptrend is also in jeopardy now , therefore the bias as of now is down.

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 it is below its all critical support points which are all the more bad sign. Furthermore, please note that few important technical indicators are also weak on the daily and weekly chart which indicates that it could seek much lower levels in coming days/weeks with in between short relief rallies; therefore it seems that the fall may continue if the technical indicators or the price pattern does not improve drastically. Since it is in medium term 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 as of now.

In view of the above, it is into medium term correction mode now and also below its important pullback threshold point of 36862.50, therefore for safe traders long trade should be avoided and can only be tried if it closes above 36862.50 and sustain for the pullback gains. However, aggressive traders can try long trade if it moves above 36570 and maintain for some time, else avoid. 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 therefore suggested to avoid long trade now.  Please note that its long term uptrend is in question now, therefore short trade should be attempted on the rise at appropriate point or can be tried on the price breakdown for taking advantage of the down move 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 36570 and maintain for some time with a stop loss of 36450. It is for the aggressive traders and could be a highly risky trade.

2. Sell on the rise near or within the range of 36860--36950 with a stop loss of 37100. It could be a highly risky trade but worth trying for intraday gains.

Or

Sell if it does not move above 36570 in first one hour of trade with a stop loss of 36700. 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.