A TECHNICAL UPDATE ON CNX-NIFTY—21.12.2023

 

CNX-NIFTY

Open-21543.50--High—21593-Low—21087.35-Close-21150.15 on 20.12.2023.

Support: 21078/21050/21037.90/20914.75/20751/20719/20599/20568.60/20475/20390/20291.55/20222.45/19991.85/19946/19875.25/19867.55/19849.75/19667/19645.50/19635.30/19627/19584.45/19523.40/19492.10/19480/19333.60/19329.10/19296.45/19253.60/19223.65/19204.85/18973.30/18887.60/18837.85.

Resistance: 21260.90/21472/21487/21492.30/21607.05/21906/22219/22463/22478/23124.

 (Bold and underlined figures are most important)

It opened with an up gap and went further high and hit yet another new all-time high of 21593 but could not sustain at the upper level and plunged down sharply and closed below the low of the previous day with a loss of 302.95 points. It was a perfect copy book reversal today,  therefore down move is likely to extend further. Please note that it has filled the gap it created on 15.12.2023 (21210.90) today and for the gap of 14.12.2023(20950) as stipulated time is over therefore chance of filling the gap has receded. It is important to mention here that for the earlier gaps, the gap filling threat on the daily chart had faded out but it is still looming on the weekly chart (gap point 20291), so be alert, cautious and watchful.

It is in the new territory but after several days of vertical rise today it has gotten into short and medium correction mode for its recent rise as it closed below its threshold point of 21398.65 & 21162.43, furthermore after a long time it has made lower top and bottom on the line chart, which is a weak sign, therefore please note that if it does not bounce back above these levels it in next 2-3 trading sessions and sustain on the closing basis then correction may deepen and break below 20942.78(figure may change) will push it into long correction mode for its recent rise and break below 20222.45 could be an extreme alert point and then correction may further deepen and can last longer. It is in the long term uptrend and bias is positive as of now and it is still buying on decline market till it indicates otherwise. But, in view of today’s reversal it is suggested to exercise restraint in buying. 

It is very important to mention here that with today’s fall three out of five important technical indicators have turned negative and indicates that it could move down further from here to 20900 levels in coming days, which is concerning. Please note that moving down its possible bounce back points could be at 20942---20900 and then 20769 or earlier or  if it moves above 21207(figure may change) and sustain on the closing basis then there may be some hope that it could move up further and may resume the up move again, else down move may continue. 

Moving up from here it may face resistance at 21207---21210.90---21235---21260.90---21472----21487—21607.05---21906 (figure may change), it may correct at any of these points and then may resume the up move again or rally may exhaust also, so be watchful.

Kindly note that moving down from here its strong support points would be at 21140----21111---21087.35---21078----20984----20950----20914.75----20769.50-----20568.60---20507.75---20390---20291.55---20222.45(figure may change) it may bounce back from any of these points, but break below each support point could weaken it and can drag it down further, which please note.

IMPORTANT NOTE: -- AS ENVISAGED IT GOTTEN INTO SHORT & MEDIUM TERM CORRECTION MODE TODAY IN AN ANTICIPATED WAY, IN FACT THERE WAS A COMPLETE REVERSAL AND IT MADE LOWER TOP AND BOTTOM ON THE LINE CHART AFTER A LONG TIME, SO FURTHER FALL FROM HERE IS VERY MUCH ON THE CARD. THEREFORE IN VIEW OF REVERSAL HURRIED BUYING SHOULD BE AVOIDED. THE LONG TERM UPTREND IS STILL INTACT AS OF NOW.  

TRADING TIPS:--

1. For safe traders long trade can only be tried if it closes above 21399 avoid buy on decline for the day. But aggressive traders can try long trade on decline near or within the range of 20950----20900 with a stop loss of 20850 or near 20769 with a stop loss of 20700.

2. It is in the long term uptrend therefore short trade in general could be a highly risky affair, but since it got into short & medium term correction mode today for its recent, therefore short trade can also be attempted on reasonable rise or on price breakdown for intraday corrective gains but with extreme caution and alert. Short trade can be tried on the rise near or within the range of 21350—21400 with a stop loss of 21450 or sell if it moves below 21080 with a stop loss of 21165. It could be a risky trade but worth trying.

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 favorable 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. 

Thanks 

Narendra Kumar Surana

Mobile—8240951127/9831313654.Email--- suranank@gmail.com