A TECHNICAL UPDATE ON CNX-NIFTY—8.1.2024

 

CNX-NIFTY

Open-21705.75--High—21749.60—Low—21629.20--Close-21710.80 on 5.1.2024.

Support: 21607.05/21593/21579.20/21505.05/21487/21472/21260.90/21078/21050/21037.90/20914.75/20751/20719/20599/20568.60/20475/20390/20291.55/20222.45/19991.85/19946/19875.25/19867.55/19849.75/19667/19645.50/19635.30/19627/19584.45/19523.40/19492.10/19480/19333.60/19329.10/19296.45/19253.60/19223.65/19204.85/18973.30/18887.60/18837.85.

Resistance: 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 positive note and had both side move during the day and finally ended the day with a gain of 52.20 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 in the week starting from 8.1.2024 else chance of filling the gap may recede for a while but eventually it will fill the gap, which please note, so be alert, cautious and watchful.

The overall chart setup is good, but 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 still below all the three critical points, but as long as it holds 21579.20(figure may change) and sustain on the closing basis then the chances of moving up will be alive. But break below 21631.97 ----21583.05----21346.82 & 21127.18(figure may change) will push it into very short, deep short, medium and long term 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. 

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, which is concerning. But please note that it is still good on the other parameters, it is not in corrective mode, above all the moving averages and price action is also positive, therefore if these parameters remain good it could still continue the up move, but if these parameters turn weak then the technical indicators weakness can play havoc and can drag it down sharply. Therefore it is suggested to defer buy on decline strategy for a while because chances of it going down sharply is still likely in coming days at this point of time, but  buy trade can be tried at the critical and most important support points with proper stop loss.   

I once again reiterate that till it holds 21579.20 (figure may change) on the closing basis pullback move may be on, else correction may deepen, moving down its important support points could be at 21707---21668---21628--21593---21579.20---21500.35----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 21500.35 may trigger fall and sustained break 20976.80 & 20769.50 may accelerate the fall. 

Similarly moving up it may face strong resistance at 21727.75---21731.40---21756---21768---21801.45---21834.35---21906--21974(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. But please note that if it moves above 21768 and sustain on the closing basis then it could retest its all-time high of 21834.35 or may go beyond it also.

IMPORTANT NOTE: -- IT IS STILL BELOW THE CRITICAL POINTS OF 21727.75---21731.40 &21801.45, FURTHERMORE IMPORTANT TECHNICAL INDICATORS ARE ALSO NEGATIVE, THEREFORE DANGER OF GOING DOWN IS STILL THERE TILL IT MOVES ABOVE THE CRITICAL POINTS AND SUSTAIN OR TECHNICAL INDICATORS IMPROVES. SO BE WATCHFUL.

TRADING TIPS:--

1. For safe traders long trade can be tried if it moves above 21732 and maintain for some time with a stop loss of 21670 or can buy on decline near or within the range of 21535---21500 with a stop loss of 21440. But aggressive traders can also try long trade on sharp decline near or within the range of 21100---21000 with a stop loss of 20930.

2. It is in the long term uptrend therefore short trade in general could be a highly risky affair, but even then 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 21790—21830 with a stop loss of 21870 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