A TECHNICAL VIEW ON CNX--BANK NIFTY FOR—27.12.2021

 

CNX--BANK NIFTY

Open—35282.20---High—35327.95---Low—34583.40---Close—34857.05on 24.12.2021.

Support:34817.50/34115/33908/33468.68/33273.95/32613.10/32415.25/32115/31906. 

Resistance: -35327.90/35359.25/35531.35/35810.90/35977.97/36151.95/36525.95/36647/36655.40/36844/36876.35/37140/37232.20/37708.75/37891/38112.75/38377.25/38426/38932.45/39117.15/39292.80/40011.15/40160.20/41367.25/41829.60.

(Bold and underlined figures are most important). 

After the severe fall on 20.12.2021 it staged a pullback up move for the next 3 days and closed with a loss of 334.10 points today, which is weak sign. It is into long term correction mode, it is decisively below last critical support range of 35760---35480---35141(figure may change) and if it remains below 35150 it may put an end to the long term uptrend. Therefore to gain some foothold it has to move above 35150(figure will change for the next day) and sustain on the closing basis else down move will continue. Please note that it seems that it has already gotten into the bear market and sustained break below 33468.68 levels which is a bear market threshold point will confirm it. Therefore moving down now the range of 34063---33468.68---32613---32465 could be considered as good support range but sustained break below 32465 could trigger an accelerated fall.

Similarly moving up from here it will face stiff resistance in the range of 35150---36926(figure may change for the next day), sustained close above 35150 may help it to get some foothold for the up move but it will gain some strength above 36926 only. But looking at the overall technical setup, it seems slightly difficult to cross this range in coming days instead chances of moving down looks much greater at this point of time. However its short and long term pullback threshold point is at 34859.22 & 35861.88(figures may change), so if it moves and sustain above 34859.22  on the closing basis then the chance of a mild pullback up move  is there and sustained close above 35861.88 may give moderate to reasonable pullback up move.

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 into medium term correction mode 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 below some on the weekly chart also and most importantly way below its long term parameters on the daily chart and below some on the weekly chart also and most importantly below all its long term moving averages on the daily chart, all together these are very weak indication and pointing towards further fall ahead in coming days, provided it remains below its critical points. Please note that few important technical indicators are negative on the  daily and weekly chart which is a very weak indication, therefore further fall from here look inevitable off course with in between short relief rallies and if indicators don’t improve or it does not bounce back above its key price levels in the next few days. The short and medium term trend is weak and the long term uptrend is also in jeopardy now, therefore the overall bias looks 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 or within the range of 34060---33908---33468.68, preferably near the lower end of the range but not below 33468.68.  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 or within the range of 34060—33908---33468, preferably near the lower end of the range with a stop loss of 33800 & 33300. It is for the aggressive traders and could be a highly risky trade.

2. Sell on the rise near or within the range 35325---35450 with a stop loss of 35550. It could be a risky trade but worth trying for intraday gain.

Or

Sell if it maintains below 34850 for some time with a stop loss of 34950. It could be a risky trade but worth trying for intraday gain.

Or

Sell if it moves below 34430 with a stop loss of 34590. 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.