A TECHNICAL UPDATE ON CNX-NIFTY—4.1.2024

 

CNX-NIFTY

Open-21661.10--High—21677—Low—21500.35--Close-21517.35 on 3.1.2024.

Support: 21505.05/21487/21472/21260.90/21078/21050/21037.90/20914.75/20751/20719/20599/20568.60/20475/20390/20291.55/20222.45/19991.85/19946/19875.25/19867.55/19849.75/19667/19645.50/19635.30/19627/19584.45/19523.40/19492.10/19480/19333.60/19329.10/19296.45/19253.60/19223.65/19204.85/18973.30/18887.60/18837.85.

Resistance: 21593/21607.05/21727.75/21731.40/21761/21801.45/21828/21834.35/21906/21974/22219/22463/22478/22590/23124/23587.

 (Bold and underlined figures are most important)

It opened on a flat to negative note and went up a bit then started moving down and finally ended the day near low of the day with a loss of 148.45 points. 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 21477.15 &20291) and there is a fair chance that it may try to fill this gap either next week starting from 1.1.2024 or week after that, so be alert, cautious and watchful.

The overall chart setup is still o.k. but it has been moving down for the last two days, please note that its critical points are 21801.45---21731.40 & 21727.75 and 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 trigger correction. It is way below all the three critical points and today it slipped into very short and deep short correction mode for its recent rise as it closed below its threshold point of 21631.97 & 21583.05, which is concerning and break below 21346.82 & 21127.18(figure may change) will push it into medium and 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 as of now, but it is suggested to defer buy on decline strategy for a while and watch how this down move culminates, therefore for the time being sell on the rise strategy can be adopted till it gives visible sign of correction completion. 

It is very important to mention here that three out of five important technical indicators are negative now on the daily chart and indicates that it could drag it down to 21150 or lower in coming days, furthermore it fell below some of its short term moving averages today and price action is also weak on and off and it has been weak for the last two days and most importantly it has slipped into correction today, therefore all together it is very concerning and can drag it down further from here. However if it closes above 21579.20 (figure may change) and sustain then there is some hope that it could stage a pullback, else correction may continue with in between relief rallies, moving down its important support points could be at 21507---21406---21337.75---21304---21179---21148---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 20976.80 & 20769.50 may accelerate the fall. Similarly moving up it may face strong resistance at 21579.20---21593---21628---21668----21707----21727.75---21731.40---21756---21768---21801.45---21834.35---21906--21974(figure may change) and the up move can take a breather at any of these points and may resume the up move again or may exhaust at any of these points also. So be watchful.

IMPORTANT NOTE: -- AS ENVISAGED IT SLIPPED INTO CORRECTION MODE TODAY AND IMPORTANT INDICATORS POINTING THAT IF IT DOES NOT STAGE A SHARP BOUNCE BACK IN A SHORTEST POSSIBLE TIME AND MOVES ABOVE ITS CRITICAL POINTS AS MENTIONED ABOVE THEN IT IS LIKELY TO  SLIP DOWN TO 21150 OR LOWER, SO WATCH OUT.

TRADING TIPS:--

1. For safe traders long trade can be tried if it closes above 21731.40 or at least above 21579.20 and sustain, avoid buy on decline for the day. But aggressive traders can also try long trade on decline near or within the range of 21380----21340 with a stop loss of 21300 or on sharp decline near or within the range of 21050---20980 with a stop loss of 20930. Please note that long trade in corrective mode could be a risky affair but can be tried at critical support points.

2. It is in the long term uptrend therefore short trade in general could be a highly risky affair, but it slipped into very short and deep short correction mode today, 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 21630—21650 with a stop loss of 21700 or sell below 21500 with a stop loss of 21585. 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