A TECHNICAL UPDATE ON CNX-BANK NIFTY—27.10.2023

 

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CNX-BANK NIFTY

Open---42708.40---High—42716.20---Low---42105.40---Close—42280.15 on 26.10.2023.

Support: 42108/41962/41829.60/41626/41569/41060/40819/39424.85/39300.

Resistance:42582.20/42986.45/43038.25/43078.90/ 43345.95/43446/43519.55/43600.35/43706.15/43830.75/43862/43950/44151.80/ 44182.50/44207.25/44254/44279.40/44390/44459.25/44498.60/44547.80/44539/44566.30/44795/44949.60/45118.05/45238.80/45655.50 45782.75/45816/45893.80/46310.40/46369.50/.        

 (Bold and underlined figures are most important)

It opened with a down gap and immediately started moving down and finally ended the day with a huge loss of 551.85 points. It has been moving down for the last six days and indicators are pointing that it is in the oversold territory now, so a short relief rally can happen any day, but the overall technical setup is exhibiting tremendous weakness on the daily and the weekly chart and the weakness has trickled down to monthly chart also, therefore eventually it is likely to move down further in coming days may be with in between relief rally. Furthermore all the five important indicators are negative now therefore chances of moving down further from here looks bright, four out of five indicators on the weekly chart are also negative as of now, which indicates that it may have deep fall in coming weeks/months, which it has been witnessing in last six days. Please note that weak indicators with weak price action are a deadly combination and it can pull it down and the price action has been weak since 18.9.2023 and it is continuing to be weak, which is a bad sign. Please note that for a steady up movement continuous positive price action is needed, else the down move may continue with in between short relief rally. It is therefore suggested to keep an eye on the price action, so watch out. It is into deep short & medium term correction mode now and long term uptrend is potentially threatened. So the further downside looks inevitable.

Kindly note that moving down from here its possible support points would be at 42080---41984---41829.60---41576---40948----40444---40164---39300(figure may change) it may bounce back from any of these points, else it may keep moving down. Please note that sustained break below 41829.60 may trigger fresh fall.

Moving up from here it may face resistance at 42720---42986.45---43038.25---43112---43345.95---43734---44096---44151.80---44237---44741---45118---45318---45363---45517---45702---45782.75---45816---45885---46310.40---46369.50(some figure may change). Please note that it may correct at any of these points and then may resume the up move again or rally may exhaust also. Please note that to gain some foothold it has to move above the range of 42720---42986.45---43038.25---43112---43345.95 and sustain on the closing basis, else down move may continue.

IMPORTANT NOTE: -- Technically it is on a very weak footing in comparison with CNX-Nifty at this point of time, so it is under performing and may keep on doing so. Please note that as of now weekly indicators are pointing towards big fall in coming weeks and it could head down to 41000 or much lower levels. It is sell on the rise market now, therefore trying long trade for pullback gains could be a risky affair, but can be tried by aggressive traders at critical support points, which please note. It is suggested to avoid long trade in general till it closes above 43345 and sustains.

TRADING TIPS:--

1. Safe traders should avoid long trade till correction completion sign emerges or it closes above 43040 at least. However aggressive traders can try long trade if it holds 42100 on decline for some time with a stop loss of 42000 for a possible relief rally. It could be a highly risky trade mind you.   

 2. It is already into deep short and medium term correction mode and long term uptrend is also severely threatened, therefore sell on the rise or sell on the price breakdown strategy should be adopted now. Short trade can be tried on the rise near or within the range of 42650---42750 with a stop loss of 42900 or sell below 42080 with a stop loss of 42300.

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

Email—suranank@gmail.com

Mobile—8240951127/9831313654.