A TECHNICAL UPDATE ON CNX-NIFTY—22.2.2024

 

CNX-NIFTY

Open-22248.85--High—22249.40—Low—21997.95--Close-22055.05 on 21.2.2024.

Support: 22053.30/21926.76/21834.35/21813.05/21801.45/  21763.95/21750.25/21731.40/21727.75/ 21593/21500.35/ 21448.65/21285.55/ 21137.20/20976.80/20769.50/20291.55/20222.45/19991.85/19875.25/19849.75/19635.30/19333.60/19329.10/19223.65/18973.30/18887.60/18837.85.

Resistance:  22079.67/22124.15/22126.80/22249.40/22371/22453/22514/22590/22618/22782/22864/23082/23111/23124/23587.

 (Bold and underlined figures are most important)

It opened with an up gap and hit a new all-time high of 22249.40 and then started moving down and in the process filled the days gap also and finally ended the day with a loss of 141.70 points. The gap it created on 16.2.2024 is still there and if it makes an effort to fill the gap in next 1-2 trading sessions, which is technically possible then it can come down to 21953.85, but if it does not fill the gap in the stipulated time then the chance of filling the gap will recede for a while. As envisaged it corrected today after 6 days of straight rise and it may correct further also so be watchful. It is important to mention here that the gap filling threat for earlier gap on the daily & weekly chart has faded out but please note that eventually it will fill the gap someday(weekly gap of 20291.55 is yet to be filled), which please note.

Kindly note that on 20.2.2024 it gave an upside breakout from the Inverse Head & shoulder pattern neckline placed at 22126.80 but could not sustain above it today on the closing basis, which is concerning and if it does not bounce back above it again in next 2-3 trading session and sustain on the closing basis then it may correct further and chances are that pattern may be negated.

The chart setup is good now but in today’s fall it closed below its two important and key points of 22126.80 (neckline) & 22079.67(short correction threshold point) therefore it is into short correction mode now for its recent rise and break below 21986.92 on the closing basis will push it into deep short correction mode, please note that if it fails to bounce back above 22126.80 in shortest possible time then down move may deepen and moving down from here the other support points could be at 22007.48---21975---21890---21801.45---21731.40----21727.75----21692----21671---21593---21500----21448.65---21370.12----21285.55----21137.20(figure may change), sustained break below the range of 21890--- 21801.45 will trigger fresh fall and sustained break below 21731.40 & 21727.75 may accelerate the fall and then break below each support point will weaken it further and sustained break below 21137.20 may witness sharp fall. Similarly moving up from here its target or resistance points could be at 22079.67---22124.15---22126.80-----22220---22371---22453---22514.

It is important to mention here that four out of five important technical indicators are positive and one indicator is negative on the daily chart giving mixed signals that it may swing either way as of now in the coming days. Furthermore one most important indicator on the weekly & monthly chart is also negative pointing that it could head down in coming weeks/months. But despite today’s fall please note that the other important parameters such as moving average placement and price action is still good, therefore if these parameter remains good and it moves above its key points as mentioned above then the up move will continue and last but not the least in worst case scenario as long as it holds 21671(figure may change) on the closing basis chances of up move will always be alive.

TRADING TIPS:--

1. Long trade can be tried on decline near or within the range of 21900---21860 with a stop loss of 21780 or if it moves above 22127 and maintain for some time with a stop loss of 22050.

2. It is in the long term uptrend therefore short trade in general could be a highly risky affair; however, even then short trade can 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 22245--- 22275 with a stop loss of 22320 or sell below 21997 with a stop loss of 22080. 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