A TECHNICAL VIEW ON CNX-BANK NIFTY FOR—3.10.2022

 

CNX-BANK NIFTY

Open-37660-High-388811-Low-37386.35-Close-38631.95 on 30.9.2022.

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: 38765.55/38855.55/39117.15/39197/39301.25/ 39424.85/39546.50/39895/40043/40160.20/40288.90/40453/40685.95/40881/41367.25/41829.60/41840.15/42696/44461/45525/45633.

 (Bold and underlined figures are most important)

It opened on a flat to positive note and then slipped down but recovered smartly during the day and finally ended the day with a whopping gain of 984.20 points. It is into medium term correction mode and after seven days of strait fall as expected it bounced back and closed above its important pullback threshold point of 39399 & 39437(figures may change) and if it sustains above these points on the closing basis then the pullback rally may extend further and it can move up to 39088----39532----39614---40039, please note that pullback rally may end at any of these points or earlier also or it is sure to end if it breaks below 38399 and sustain on the closing basis and then it may resume down move again.    

It is looking weak on the chart as it is well below its all short term moving averages and below some medium term averages also, broken multiple bottom on the line and bar chart, decisively broken its rising trend line and most importantly it is decisively below its most important and critical or say make or break point of 39895, all together these are highly concerning and indicate further fall ahead. Please note that to get into the up grove again it has to move above its short term moving averages and then above its critical point of 39895 and sustain on the closing basis else down move will continue in coming days with in between short relief rallies. Moving down from here it will find support at 38437---38399--- 37708.75—37386.35---37249.50---36248.60—35761.13---35585.20---35481.20, as it is below its threshold point of 38796 therefore it is already into medium term corrective mode, break below 37708.75 will weaken it further, break below 35761.13 will push it into major long term corrective mode and sustained break below 35585.20 & 35481.20 may accelerate the fall.

It is important to mention here that its long term moving averages are placed in the range of 37169—36268(figure will change every day),  break below 37169 will be an alert sign for the long term uptrend and sustained break below 36266 may put the long term uptrend in potential danger which may please be noted.  Please note that this range will act as a very strong support for it and it may bounce back from this range also for couple of times as it bounced back near this area today  but it is very much likely to break this range eventually this is what technical indicators suggest as of now. Please note that sustained break below the range may witness an accelerated fall.

 The long term technical setup is also on the verge of severe threat so be watchful, it is already into medium term correction mode, furthermore all the four important technical indicators are distinctly weak, which is highly concerning. Please note that if these indicators do not improve fast it can drag it down further and it can improve only if it gives good and sustained up move for the next few day, it did stage a robust recovery today but looking at last few days price movement it seems less likely that it could continue with the up move with today’s pace, therefore as of now further fall looks inevitable in coming days after the on-going pullback rally is exhausted. It is important to mention here that the indicators as of now suggest that it could hit 36500 levels or may be much lower levels in coming days/weeks/months. The undertone is bearish as of now.

In view of the above observation, it is into medium term correction mode. Therefore it is suggested to adopt sell on the rise or sell on the price breakdown strategy till a visible sign of correction completion emerges. But today it closed above its pullback threshold point of 39399 & 39437 so the pullback rally may extend if it hold these points, therefore those who wish to take advantage of the pullback gains can try long trade if it holds above 38475 for some time with a stop loss of 38250. Please note that in general long trade in a corrective market for pullback gains could a risky affair because pullback rallies are treacherous in nature and can end abruptly trapping the traders unaware but it can be tried at the most critical points. It is suggested to sell on the rise near or within the range of 39200—39400 with a stop loss of 39550 or sell if it moves below 38399 and maintain for some time with a stop loss of 38675. It is into medium term correction mode now and long term trend is also severely threatened. So watch out and be extremely careful in long trades.

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.