A TECHNICAL VIEW ON CNX--BANK NIFTY FOR—20.12.2021

 

CNX--BANK NIFTY

Open—36491.80---High—36550.75--Low—35535.05---Close—35618.65 on 17.12.2021.

Support:35531.35/35359.25/35327.90/34817.50/34115/33908/33273.95. 

Resistance: -35810.90/35977.97/36151.95/36525.95/36647/36655.40/36844/36876.35/37140/37232.20/37708.75/37891/38112.75/38377.25/38426/38932.45/39117.15/39292.80/40011.15/40160.20/41367.25/41829.60.

(Bold and underlined figures are most important). 

It hit a high of 37581.05 and low of 35535.05 during the week ended on 17.12.2021 and closed near the low of the week with a huge loss of 930 points on the last day of the week, closing near the low of the week is a pretty weak sign. Furthermore it has slipped into long term correction mode as it has broken its threshold point of 35761.25(figure may change), it has slipped way below its important pullback threshold point of 36862.30(figure may change) and most importantly it has decisively moved below its long term uptrend upholding threshold point of 36958(figure will change every day), all these are very weak indication and its long term uptrend looks in deep trouble now and if it remains below these critical points it may be heading for moderate to big fall in coming days. Moving down its most important support range would be 35545---35170(figure may change), please note that it is already into long term correction mode but may stage a bounce back from this range but sustained break below 35170   may put an end to the long term uptrend for some time which should be kept in the back of the mind. To keep the hope of long term uptrend intact or alive it has to sustain above support range last point of 35170(figure will change every day) and it may get some strength if it moves above its long term uptrend upholding threshold point of 36958(figure will change every day) else down move should continue and finally the benchmark or threshold point of getting into confirmed bear market is 33463.68.

Similarly moving up from here it will face stiff resistance in the range of 36400---36958(this figure will change every day) ---37581 moving above 36958 will give some strength and sustained close above 37581 may help it to gain some up momentum. But looking at last few days price pattern it seems slightly difficult to cross this range in coming days instead chances of moving down looks much greater at this point of time.

It is into long term correction mode now, it is below its short term moving averages on the daily and weekly chart, it is also below its medium term moving averages on the daily chart, and way below some of its long term parameters and most importantly below its critical points as mentioned above, all together these are very weak indication and pointing towards further fall ahead in coming days, provided it remains below its critical points. But please note that few important technical indicators which were weak on the daily and weekly chart for some time, but some indicators are still giving positive indication on the daily chart but price pattern is not supporting them which is not a good sign, therefore if it does not bounce back above its key price levels in the next few days then down move will continue with in between short relief rallies. The short and medium term trend has turned weak again and long term uptrend is also in question now therefore overall bias looks tremendously weak as of now.

In view of the above, it slipped into long term correction mode now and almost on the verge of ending the uptrend for now, therefore for safe trader’s long trade should be avoided till clarity on correction completion emerges. However aggressive traders can try long trade on decline near the lower end of the range of 35545---35170(figure may change) but not below 35170. I strongly caution here that long trade in a corrective mode for pullback gains could be a risky affair; therefore one should be extremely cautious and vigilant in the long trade at this point of time. It is suggested to avoid long trade for now. It is still in corrective mode; therefore short trade can 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 on decline near the lower end of the range 35545---35170 with a stop loss of 35000. It is for the aggressive traders and could be a highly risky trade.

2. Sell on the rise near or within the range 36180---36280 with a stop loss of 36400. It could be a risky trade but worth trying for intraday gain.

Or

Sell if it moves below 35530 with a stop loss of 35650. 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.