A TECHNICAL VIEW ON CNX-BANK NIFTY FOR—30.8.2022

 

CNX-BANK NIFTY

Open-38111.60-High-38397.10-Low-37943.85-Close-38276.70on 29.8.2022.

Support: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:38377.35/38426.65/38765.55/38855.55/39117.15/39197/39424.85/39546.50/39895/40160.20/41367.25/41829.60.

 (Bold and underlined figures are most important)

It opened with a huge down gap then mildly recovered and finally ended the day with a colossal loss of 710.45 points. The pullback rally broke down today and  as it closed below its threshold point of 38796 it slipped into medium term correction mode which is concerning. Moving down its next support range would be 38134---37996.56---37755.55---37754.65----37594.15---37491 break below this may weaken it further, please note that its last critical and long term support range would be between 36609---35730--- (figure may change every day) ---35585.20---35481.20, it may bounce back near or within the range may be few times but technical indicators as of now suggest that eventually it is going to break this range in coming days/weeks. Please note that sustained break below 36609 will weaken it further and sustained break below 35481.20 on the closing basis may potentially threaten the long term uptrend and the fall will accelerate which may please be noted. Similarly moving up it will face stiff resistance at 38372---38556---38637----38708---38768---38851---38960----38987.15, sustained close above 38372 on the closing basis will give a ray of hope that it may move up further and close above 38987.15 will strengthen it further else down move will continue.

The technical setup has got a jolt with today’s fall and the uptrend seems to be in jeopardy now, furthermore after making, higher top & bottom on the line and the bar chart for a long time it has made a lower top and lower bottom on the line & bar chart for the first time which is highly concerning, it is also below its short term moving averages on the daily chart is also a bad indication. Please note that together with the above weak parameters the most important factor is that almost all except for one important technical indicators are showing distinct weakness on the daily chart, therefore if it does not bounce back sharply in next 3-4 trading session and move above its critical points then the further fall from here looks inevitable and it may go down sharply with in between short relief rallies. It seems that it has changed track now and from buy on dip market it is now sell on the rise market till it signals otherwise which please note.

In view of the above observation, since it slipped into medium term corrective mode therefore long trade should be avoided now and short trade strategy should be adopted till it gives visible sign of reversing the trend. Therefore it is suggested to sell on the rise near or within the range of 38650----38700 with a stop loss of 38800 or sell near 38397 if it does not move above it in first hour of trade with a stop loss of 38500 or sell if it moves below 38111 and then below 37943 with a stop loss of 38300 & 38125 respectively. However highly aggressive traders can try long trade at appropriate point for pullback gains with self defined stop losses but please note that pullback rallies are treacherous in nature and can end abruptly also therefore can trap the trader unaware, so please be cautious in the long trade. The short term trend is in corrective mode and it is into deep correction now, medium and long term trend still looks o.k. as of now, but since it is into deep 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.