A TECHNICAL UPDATE ON CNX-NIFTY—19.1.2024

 

CNX-NIFTY

Open-21414.20--High—21539.40—Low—21285.55--Close-21462.25 on 18.1.2024.

Support: 21448.65/21337.75/21037.90/20976.80/20769.50/20291.55/20222.45/19991.85/19875.25/19839/19635.30/19333.60/19329.10/19223.65/18973.30/18887.60/18837.85.

Resistance: 21492/21500.35/21593/21680/21727.75/21731.40/21763.95/21801.45/21834.35/21906/21931/21974/21982/ 22027/22073/22124/22220/22459/22478/22590/23082/23124/23587.

 (Bold and underlined figures are most important)

It opened with a down gap for the 2^nd day in a row and went down further and finally ended the day with a loss of 109.70 points. Please note that the gap it created today and on 17.1.2024 is still there and if it makes an effort to fill the today’s gap in next 4-5 trading session and the gap of 17.1.2024 in next 3-4 trading sessions, which is technically possible then it can come up to 21550.45 & 21969.80, but if it fails to fill the gap in the stipulated time then the chances of filling the gap will recede for the time being. It is important to mention here that the gap filling threat for earlier gap on the weekly chart has faded out but please note that eventually it will fill the gap someday, which please note.

The technical setup has weakened as it is well below its most critical & important points of 21801.45---21731.40 & 21727.75 and to keep the up momentum going in the year 2024 it has to sustain above these points on the closing basis else it may head down. Furthermore now it is into very short, short, deep short and medium term correction mode as it close below its threshold point of 21964.73---21853.38---21804.45 &21568.23 (figure may change) please note that break below 21348.58 (figure may change) will push it into long term correction mode for its few months rise and sustained break below 20222.45 could be an extreme alert point and then correction may further deepen and can last longer. It is in medium correction mode but the long term uptrend is still intact as of now. It is important to mention here that its long pullback threshold points is at 21483.46(figure may change) and if it moves above it and sustain 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 coming days, furthermore short chart setup has turned weak, it has broken its recent bottom on the line and bar chart, it is  below all its short term moving averages and the price action has also been terribly bad, all together situation is highly concerning and further fall looks inevitable, therefore please note that if it fails to stage a sharp recovery in a shortest possible time and moves above some of the key points as mentioned above and sustains then the fall is likely to continue. 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 up from here it may face strong resistance at 21448.64---21483.46----21583.75---21593---21608---21706.69---21727.75----21731.40----21757.29---21801.45---21834.45---21926.24---21956.43---22124.15---22220----22459---22478(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. 

Similarly moving down from here its important support points could be at 21550.50---21448.65---21415---21287---21248---21206---21089---21040----20976.80----20769.50(figures may change), please note that it can bounce back from any of these points and may resume the up move again but break sustained break below 21448.65 may trigger fresh fall and sustained break below 20976.80 & 20769.50 may accelerate the fall. 

IMPORTANT NOTE: -- THE CORRECTION IS DEEPENING AND IF IT DOES NOT BOUNCE BACK ABOVE THE PULLBACK THRESHOLD POINT OF 21483.46 AND SUSTAIN 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 21483.46 and sustain, avoid long trade on decline for the time being. But aggressive traders can try long trade on sharp decline near 21205 with a stop loss of 21140 or if it holds the level of 21448.65 for some time with a stop loss of 21390.  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 medium term 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 21600--- 21650 with a stop loss of 21740 or sell below 21390 with a stop loss of 21450. 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 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