A TECHNICAL VIEW ON CNX-BANK NIFTY FOR—29.8.2022

 

CNX-BANK NIFTY

Open-39129.65-High-39337.10-Low-38846.80-Close-38987.15on 26.8.2022.

Support:38855.55/38765.55/38426.65/38377.35/38134/38112.75/37988.60/37708.75/37581.05/37471/37238/36993/36876.35/36718.80/36651.85/36497.35/36375.35/36332/36083.70/35985.25/35926/35810.90/35762/35585.20/35543.10/35511/35481.70. 

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

 (Bold and underlined figures are most important)

It opened on a positive note and went up further but could not sustain at the higher level and drifted down but finally ended the day with a meager gain of 36.40 points. It is still in corrective mode and the pullback rally is on, so going up it can possibly exhaust at these points 39068---39332--39398 or earlier also, please note that sometimes it moved beyond the range also in last 2-3 days but retreated back, therefore it seems that the pullback rally is losing steam but it is  down now and not out of race for resumption of the uptrend again as yet because most importantly a close below 38950.75 and then 38297.75 as of now will only confirm the end of the pullback rally and then it may start a steady down 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, but looking at last 2-3 days price movement it looks fatigued therefore resumption of uptrend seems less likely. Moving down its key support points would be at Moving down its key support points would be at 38950.75--- 38930.66----38844---38297.75---38134---37996.56---37755.55---37754.65----37594.15---37491---36993---36830---36640. Please note that it is already into very short correction mode as it is below its threshold point of 39166.87, sustained break below 38950.75 &38297.75 on the closing basis may end this pullback rally for good, sustained break below the range of 37996.56---37755.55---37754.65----37594.15---37491 on the closing basis may deepen the fall and jeopardize the medium and long term uptrend and finally sustained break below 36600 may accelerate the fall.   

 The overall technical setup is still o.k. , but after making, higher top & bottom on the line and the bar chart for a long time it has made a lower top on the line chart today which is concerning, it will signal break down of the pullback rally once it establish lower bottom by closing below 38950.75 & 38297.75 so watch out. Furthermore almost all except for one important technical indicators are showing distinct weakness on the daily chart, it is also below some of its short term moving averages which is a bad indication, therefore if it does not bounce back sharply in shortest possible time and move above its critical points then the fall looks inevitable and it may go down sharply with in between short relief rallies. Therefore it is suggested to avoid long trade till it moves above its recent top of 39038.50(on the line chart) and then above 39656.15 and finally 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 seems to be 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 moves above 39039 and maintain for some time with a stop loss of 38820 or can buy if it holds 38950.75 for some times but not below it with a stop loss of 38800. Please note that long trade below 38950.75 could be a highly risky bet for the day, therefore I would suggest avoiding long trade on decline for the day. Although it is in the long term uptrend as of now but into corrective mode 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 39380---39425 but not above it with a stop loss of 39500 or sell if it moves below 38950 and then below 38297 with a stop loss of 39120 & 38500 respectively. 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 favourable 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.