A TECHNICAL VIEW ON CNX-BANK NIFTY FOR—10.10.2022

 

CNX-BANK NIFTY

Open-39093.50-High-39235.05-Low-38807.50-Close-39178.05 on 7.10.2022.

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 had good but volatile movement during the week ended on 7.10.2022. As it closed above its pullback threshold points of 38399 & 38437 on 30.9.2022, it staged a good pullback up move during the week and hit a high of 39608.35 for the week which was close to one of the approximate pullback ending point of 39614 and then retreated back. Please note that to get back into strong up momentum again it has to move above 39895 and sustain on the closing basis then it could retest again its all-time high of 41840.15 or may go beyond it also else it may drift down with in between relief rallies. Meanwhile it is already into major correction mode if it stays below 39586.44 and it will slip into very short term correction  mode for the recent rise it had if it moves below 39084, however as long as it holds pullback threshold points of 38399 & 38437 chances of the pullback up move will be there. Moving down from here it may find good support at 38760---38497----38235---38029---37911---37830, similarly moving up it will find stiff resistance at 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 37258—36309(figure will change every day),  break below 37258 will be an alert sign for the long term uptrend and sustained break below 36309 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 also 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, this may be kept in mind. Furthermore all the four important technical indicators are 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 , it did stage a sharp recovery during the preceding week but could not move above its critical points of 39895 on the closing basis. Please note that if it fails to give sharp up move in a shortest possible time say in next 4--5 trading sessions and move above its critical points stated above then it may start drifting down again. It is important to mention here that despite  good rise the technical indicators are still pointing that it could hit 36500 levels or may be much lower levels in coming days/weeks/months. The undertone is mixed but with bearish tilt as of now.

In view of the above observation, it is into major correction mode but at the same time above the pullback threshold points of 38399 & 38437 also. Therefore both side trades can be tried depending on the price movement. For safe traders long trade can be tried if it moves above 39285 and maintain for some time with a stop loss of 39100 or on decline near 38400 with a stop loss of 38275, but aggressive traders can also try long trade on decline near 38030 with a stop loss of 37920. 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 39770 or sell if it moves below 39084 with a stop loss of 39300 or sell below 38800 with a stop loss of 39100.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.