A TECHNICAL UPDATE ON CNX-BANK NIFTY—25.1.2024

 

 

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 CNX-BANK NIFTY

Open—44489.40--High—45485.50--Low—44489.40---Close—45082.40 on 24.1.2024.

Support: 44949.90/44710.55/.44547.80/44279.40/44151.80/43830.75/43796.75/43600.35/43345.95/43230.95/42582.20/42105.40.

Resistance: 45118.05/45239/45281/45622/45655.50/46310.10/46369.50/46507.15/46886.90/46919.70/47010.80/47411.65/47481.35/47588/48166.15/48203.45/48219.95/48292.25/48381.95 48636.45/48722/48925/49024/49567.60/49696/49857/50324/50633.60/50850.

(Bold and underlined figures are most important)

It opened with a big down gap and then had both side moves during the day and in the process filled the days gap also and finally ended the day with a meagre gain of 67.35 points. Please note that it is exhibiting huge volatility which is not good for a steady and smooth movement and may eventually drag it down lower.

It is important to mention here that its critical & important points are 48203.45---48292.25 & 48636.45and to keep up the up momentum going in the year 2024 it has to sustain above these points on the closing basis else it may head down.  It is way below all the three critical points, it has decisively breached all the important correction threshold points for its recent months rise and most critical points  48231.30---48133.94---47999.87---47447.93---47387.89---47360.75---47095.12----46369.50----46270.95(figures may change), which is a hugely negative sign and indicates further fall ahead. Please note that break below 44746.91(figure may change) will push it into deep medium term correction mode for its earlier rise. It is into long term correction mode now for its recent months rise, and most importantly long term uptrend is also threatened as it decisively below its long term moving average upper band of the range which is at 45521(figure will change every day) and this is highly concerning and if it breaks the lower band of the range which is at 44326(figure will change every day) then the long term uptrend will be in potential danger. It is important to mention here that its short and long pullback threshold points are at 45389.98 & 45468.60(figure may change) and if it moves above 45389.98 then it may give a feeble up move but if it moves above 45468.80 and sustains on the closing basis then it could give a meaningful up move and the hope of continuation of the up move will be alive, else correction may continue with very short relief rallies.

It is very important to mention here that all the five important technical indicators are negative now on the daily chart and indicates that it could drag it down to much lower levels in the coming days,  one of the most important indicator on the weekly & monthly chart is also negative and it is into long term corrective mode. Furthermore the chart setup has weakened as it has broken all its recent key bottoms and making lower tops & bottoms, fallen below all its short term moving averages on the daily and weekly chart, below some medium term moving averages and most importantly below some long term moving averages also and price action is also terribly weak, therefore all together the situation is highly concerning and further fall from here looks inevitable with in between short relief rallies. In view of the overall observation it is suggested to adopt sell on the rise strategy or sell on the price breakdown till visible sign of correction completion emerges. However long trade can also be tried at the most critical support points with strict short stop losses for pullback gains, but it could be a risky affair mind you. 

Moving down from here its important support points could be at 44949.50---44746.91---44607----44506---44404----44312---44279.40---43830.25---43796.75---43600.35(figures may change), please note that it can bounce back from any of these points and may resume the up move again, else may keep moving down.

Similarly moving up it may face strong resistance at 44949.50---45389.98---45468.10---45947----46074----46397---46563----46848---47052----47405---47542----47658----47807---48203.45---48219.95---48231.30----48252.80---48292.25---48305.40---48381.95----48636.45(figure may change) and it can correct at any of these points and then may resume the up move again or it may exhaust the up move at any of these points also and may head down. 

IMPORTANT NOTE: -- ITS LONG TERM AVERAGE RANGE IS 45521---44326(FIGURE WILL CHANGE EVERY DAY) IT IS DECIESIVELY BELOW ITS UPPER BAND OF THE RANGE WHICH IS HIGHLY CONCERNIN AND BREAK BELOW 44326 WILL PUT THE LONG TERM UPTREND IN THE POTENTIAL DANGER. PLEASE NOTE THAT IF IT DOES NOT BOUNCE BACK ABOVE 45468.10 & 45521 AND SUSTAIN ON THE CLOSING BASIS THEN THE DOWN MOVE MAY CONTINUE. 

TRADING TIPS:--

1. Safe traders can try long trade only if it closes above its pullback threshold point of 45468.10 and sustain, avoid long trade on decline for the time being. But aggressive traders can try long trade on decline near or within the range of 44400---44325 with a stop loss of 44160 or if it holds 45015 for some time with a stop loss of 44900 for possible relief rally. Please note that long trade in corrective mode could be a risky affair but can be tried at extreme critical support points with strict stop loss for pullback gains.

2. It is in the long term uptrend therefore short trade in general could be a highly risky affair, but it is into long deep corrective mode, 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 45500---45600 with a stop loss of 45700 or sell below 45000 with a stop loss of 45150. It could be a risky trade but worth trying for intraday corrective gains

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. 

Thanks 

Narendra Kumar Surana

Email—suranank@gmail.com

Mobile—8240951127/9831313654.

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