A TECHNICAL VIEW ON CNX-BANK NIFTY FOR—24.8.2022

 

CNX-BANK NIFTY

Open-37955.45-High-38869.90-Low-37950.85-Close-38697.65 on 23.8.2022.

Support:38426.65/38377.35/38134/38112.75/37988.60/37708.75/37581.05/37471/37238/36993/36876.35/36718.80/36651.85/36497.35/36375.35/36332/36083.70/35985.25/35926/35810.90/35762/35585.20/35543.10/35511/35481.70. 

Resistance:38765.55/38855.55/39117.15/39197/39424.85/39546.50/39895/40160.20/41367.25/41829.60.

 (Bold and underlined figures are most important)

It opened with a big down gap today and then recovered and after 2 days of good fall it bounced back today from near its critical support range of 37996.56---37755.55---37754.65  and closed with a good gain of 399.90 points. It is in corrective mode and today’s rise was just a pullback up move which can exhaust at these points 38855---39069---39332--39398 or earlier also and most importantly close below 38297.75 will confirm the end of the pullback up move. Please note that to resume the strong uptrend again it has to move above its  critical resistance points of 39547—39656.15--- 39759.15---39895 and sustain on the closing basis then it may be back on the up track again, else down move will continue with intermittent relief rallies. Moving down its key support points would be at Moving down its key support points would be at 38134---37996.56---37755.55---37754.65----37594.15---37491---36993---36830---36640. Please note that it already into very short correction mode as it is below its threshold point of 39166.87, it is also below its next key support level of 38930.66 which has weaken it further, sustained break below the range of 37996.56---37755.55---37754.65----37594.15---37491 on the closing basis may jeopardize the on-going uptrend and finally sustained break below 36600 may accelerate the fall.   

The overall technical setup is still o.k. despite last two days fall, because it is still making, higher top & bottom on the line and the bar chart which is a positive sign. But almost all except for one important technical indicators are showing distinct weakness on the daily chart, furthermore it has also gone below some of its short term moving averages which is also concerning, therefore if it does not bounce back sharply and move above its critical points in a shortest possible time then the fall looks inevitable and it may go down sharply with in between short pullbacks. Therefore it is suggested to avoid long trade till it moves its recent top of 39656.15(on the line chart) and then above its last critical point of 39895 on the closing basis. Please note that after the key upward reversal on 19.8.2022 the on-going uptrend is in potential danger, therefore buy on dip strategy should be put on hold for safe traders till clarity on the continuation of the uptrend emerges.

In view of the above observation for safe traders long trade can only be tried once it closes above   39895 and sustain avoid buy on decline for the day. However highly aggressive traders can try long trade if it maintain above today’s close of 38697.65 for some time with a stop loss of 38540 or can buy on decline at appropriate points or near 37755.55---37754.65   but not below it with a stop loss of 37600. But I would suggest avoiding long trade on decline for the day. Although it is in the uptrend but into corrective mode now therefore short trade can also be attempted after a reasonable rise or on the price breakdown for corrective gains. Sell on the rise near or within the range of 39200---39350 but not above it with a stop loss of 39450 or sell if it moves below 39297 with a stop loss of 39500. Please note that long trade could be a risky affair for the day as it is in a corrective mode but short trade may not be that risky bet now therefore worth trying at this juncture. The short term is in corrective mode, medium and long term trend is still positive as of now, but since it is into corrective mode therefore it has to be seen how correction culminates.

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.

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. 

m for strategic guidance to enter and exit trade.

Thanks 

Narendra Kumar Surana

Mobile—8240951127/9831313654.