A TECHNICAL VIEW ON CNX-BANK NIFTY FOR—13.10.2022

 

CNX-BANK NIFTY

Open-38784.20-High-38935.35-Low-38606.40-Close-39118.55 on 12.10.2022.

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

Resistance: 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 positive note and moved in a range for a while and in the late afternoon moved up smartly and finally closed with a gain of 406.10 points. It is already into major correction mode as it is well below its threshold point of 39586.44. But please note that as long as it holds its pullback threshold point of 38437 & 38399, chance of bounce back will always be there. But to get back into the up grove again it has to move above its most important and critical points of 39586.44 & 39895 and sustain on the closing basis else it will oscillate in a broad range of 39895----39586.44---38399----37386 and sustained break below 38399 may witness further fall. Moving down from here it may find good support at 39084---38935---38776---38497----38437---38399---38235---38029---37911---37830, similarly moving up it will find stiff resistance at 39532---39586.44---39614---39895---40039---40139---40665---40789---40819---40950. Please note that if it moves above 39895 and sustain on the closing basis then it could retest its recently made new all-time high of 41840.15 or may go beyond it also.     

It is important to mention here that its long term moving averages are placed in the range of 37326—36368(figure will change every day),  break below 37326 will be an alert sign for the long term uptrend and sustained break below 36368 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 sometimes back also  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 short term technical setup is slightly weak. It is already into major correction mode, below some short & medium term moving averages on the daily chart and most importantly a head & shoulder pattern is visible and if it gives sustained break below its neckline of 37943 & 37386.15 then it may go down deeply and the maximum down side target could be 33500, similarly if it moves above 39759.15 then it will be a pattern failure this may be kept in mind. Furthermore all the four important technical indicators are weak on the daily chart as of now, which is 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. Please note that if it fails to give sharp up move in a shortest possible time say in next 1-2 trading sessions and move above its critical points of 39586.44 & 39895 and sustain then it may continue to drift down. The undertone is mixed but with slightly bearish tilt as of now.

In view of the above observation, it is into major correction mode but at the same time it is well above its pullback threshold points of 38399 & 38437 also. Therefore both side trades can be tried depending on the price movement till it breaches 38399 levels on the downside and 39895 levels on the upside. For safe traders long trade can be tried if it moves above 39285 and sustain for some time with a stop loss of 39050 and avoid buy on decline for the day. But aggressive traders can try long trade if it moves above 39180 and sustain for some time with a stop loss of 39050 on can buy on decline near 38700 with a stop loss of 38500, but mind you buy on decline and particularly below 38712 could be a risky affair for the day.  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. Similarly short trade can be tried on the rise near or within the range of 39500---39600 with a stop loss of 39780 or sell if it moves below 38600 with a stop loss of 38800 or sell below 38400 with a stop loss of 38650.It is into major correction mode but long term trend still seems to be o.k.as of now.  

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.