A TECHNICAL VIEW ON CNX-BANK NIFTY FOR—1.9.2022

 

CNX-BANK NIFTY

Open-38516.95-High-39606.55-Low-38472.70-Close-39536.75 on 30.8.2022.

Support: 39424.85/39197/39117.15/38855.55/38765.55/38377.35/38426.65/38134/38112.75/37988.60/37708.75/37581.05/37471/37238/36993/36876.35/36718.80/36651.85/36497.35/36375.35/36332/36083.70/35985.25/35926/35810.90/35762/35585.20/35543.10/35511/35481.70. 

Resistance:39546.50/39656.15/39895/40160.20/41367.25/41829.60.

 (Bold and underlined figures are most important)

After yesterday’s sharp fall it rallied in an unprecedented manner today and ended the day near the high of the day with a whopping gain of 1260.05 points, this type of move I have not witnessed in recent years, please note that one day sharp fall and the very next day robust rise this type of volatility is concerning and not good for a steady market,. But the fact remains that after making lower top and bottom recently on the line and bar chart it has crossed its recent tops on the line and bar chart both but yet to make higher bottom, it has also bounced back above its all short term moving averages, it exhibited extra ordinary strength today, therefore it seems that today’s rally may have reversed the downtrend, however it has to be watched over the next 2-3 trading session for the confirmation of the reversal because these types of moves  may fizzle out fast also as it had happened in the past too, therefore confirmation is a must. Please note that to continue the strong up momentum it has to move above its critical and most important resistance point of 39546.50---39656.15---39759.15---39895---40160.20---41367.65—41829.60, if it moves above 39895 and sustain on the closing basis then it could retest it’s all time high of 41829.60 or may go beyond it also else it could drift down again. Similarly moving down it will have strong support points at 39536.75---39396---39214.15---39166—38796---38134---37943.85---37755.55, break below 39166 will push it into short term correction mode again and break below 38796 will weaken it further and break below 37943.85 may accelerate the fall which may please be noted.

The technical setup has improved with today’s sharp up move but it has to be watched over for the next 2-3 trading session whether this up move will sustain or not, because almost all important technical indicators except for one are still showing distinct weakness on the daily chart, therefore if these indicators do not turn positive shortly then weakness in indicators may still come into play and can drag it down. Please note that the indicators can turn positive only if the sharp up move continues for few days. It is important to mention here that a vertical rise may have a vertical fall too and vice a versa as it happened in last two days, so be watchful.

In view of the above observation, long trade can be tried if it moves above 39607 and maintain for some time with a stop loss of 39440 or can buy on decline near or within the range of 38860---38650 with a stop loss of 38460. It is suggested to avoid long trade on decline for the day. Although it seems that downtrend is reversed but confirmation is awaited therefore short trade can also be tried after reasonable rise or on price breakdown for intraday corrective gain. Sell on the rise near or within the range of 40150---40250 with a stop loss of 40400 or sell if it moves below 39440 with a stop loss of 39607. Please note that looking at today move sell on the price breakdown would be a relatively safe trade but aggressive traders can try both. The short term trend is positive now, medium and long term trend still looks o.k. as of now. However in light of today’s move be alert and cautious in next 2-3 trading sessions.

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.