A TECHNICAL VIEW ON CNX-BANK NIFTY FOR—14.10.2022

 

CNX-BANK NIFTY

Open-38957.65-High-3906130-Low-38437.95-Close-38624 on 13.10.2022.

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 negative note and tried to recover but could not and gradually slip down and finally ended the day with a loss of 494.55 points. It is already into major correction mode as it is well below its threshold point of 39586.44 and also slipped into short correction mode today for its recent rise as it is below its threshold point of 39084. 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 but break below 38399 may witness further fall. Moving down from here it may find good support at 38497----38437---38399---38235---38029---37911---37830, similarly moving up it will find stiff resistance at 38715---38935----39084---39532---39586.44---39614---39895---40039---40139---40665---40789---40819---40950.

It is important to mention here that its long term moving averages are placed in the range of 37346—36387(figure will change every day),  break below 37346 will be an alert sign for the long term uptrend and sustained break below 36387 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 below some short & medium term moving averages on the daily chart, made lower top and bottom on the line chart which is highly concerning 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 and move above its critical points of 39586.44 & 39895 and sustain then it may continue to drift down and chances of moving above these points looks bleak at this point of time. The undertone is mixed but with slightly bearish tilt as of now.

In view of the above observation, although it is above its pullback threshold points of 38399 & 38437 but it had made lower top and bottom on the line chart which is concerning and turned it into sell on the rise market. Therefore for safe trader’s long trade can only be tried if it closes above 39119 else avoid. But aggressive traders can try long trade on decline near 38400 but not below it with a stop loss of 38250 for pullback gains.  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. Since it is in major correction mode and short correction mode also therefore short trade can also be tried on the rise near or within the range of 39100---39250 with a stop loss of 39350 or sell if it moves 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.