A TECHNICAL UPDATE ON CNX-BANK NIFTY—16.5.2024

 

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CNX-BANK NIFTY

Open—47923.10--High—47957.20--Low—47534.50---Close—47687.45 on 15.5.2024.

Support:  47313.35/47279.80/46919.70/46579.05/46529.05/45828.80.                           

Resistance:47737.20/48161.25/48203.45/48292.25/48636.45/ 49057.80/49173.36/49262/49396.75/49446.69/49676/49732/49883/49974.75.        

It opened on a positive note and then went up little further and thereafter steadily moved down and finally ended the day with a loss of 172 points. After two days of pullback up move it had a down move today and it seems that the rally may have ended as it closed below its recent rise correction threshold point of 47727.35 and pullback threshold point of 47689.25, which is a weak sign. Furthermore it is already into deep correction mode for its earlier rise also, therefore for the up move to continue it has to move above the aforesaid points in the next 1-2 trading sessions and sustains on the closing basis, else down move may continue.

STRENGTH:-

1. It is in the long term uptrend as of now. But break below 46913 will threaten the uptrend.  

2. The short range for it now is between 49974.75---47737.20(it is below this range) and the long range is between 49974.75----46913----46579.05.

3. Moving down the possible good bounce back point could be at 47737.20---47689.25----47380---47258---46913---46579.05, sustained break below 46913 will threaten the long term uptrend and finally sustained break below 46579.05 could be a warning sign and can drag it down to devastatingly lower levels in coming days and may make the on-going correction more painful time wise and value wise both, which may please be noted. So 46896 &46579.05 is a very strong and may be the last bounce back support points as of now or make or break point or benchmark point.

WEAKNESS:-

1. It is into deep correction mode now for its earlier rise. It is also below its correction threshold point of 47727.35 for its recent rise.

2. It is below its most critical points of 48203.45---48292.25 &48636.45, please note that it is must to stay above these point to keep up the up momentum going in the year 2024.It will catch up momentum above 48636.45 only.

3. It is below all its short term moving averages on the daily chart and some below the weekly chart also and the important range of averages is between 48181---48165---48061(figures will change every day), sustained close above this range may provide good strength and an impetus to move up.

4. It is below some of its medium term moving averages on the daily chart.

5. It is below its pullback threshold point of 47689.25(figure may change), if it closes above it and sustains then it will give a ray of hope for a meaningful up move and then the possible upside target or resistance points could be at 47727.35---47737.20---48126---48203---48292---48479---48636.45—48832---49269----49377.

6. It has broken its recent bottom on the line and bar chart.

7. Technical indicators are weak on the daily/weekly and monthly charts and pointing that it could head down to much lower levels in coming days/weeks and months.

8. The price action was weak today.

OVERALL VIEW:--It is into deep correction mode for its earlier rise and also in correction mode for its recent rise and below its pullback threshold point also, so overall technical setup is weak therefore further fall may be ahead in the coming days. Since it is correction mode therefore it is sell on the rise market or sell on the price breakdown as of now. Therefore for safe traders it is suggested to avoid long trade till it closes above 47689.25 &47727.35 and sustain. But aggressive traders can try long trade on decline at important support points or range for pullback gains, but please note that long trade in a corrective market could be a risky affair, so be alert and watchful. The long term trend is still up, but the short term bias is negative as of now. Please note that today was a weak day.

TRADING CALL: --                                                                   

1. Aggressive traders can try long trade on decline near 46913 and then near 46580 with a stop loss of 46800 & 46450 or can buy if it moves above 47750 and maintain for some time with a stop loss of 47570.

2. Short trade can be tried on the rise near or within the range of 48000 —48100 with a stop loss of 48250 or can sell below 47520 with a stop loss of 47740.  It could be a risky trade but can be tried 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

Email—suranank@gmail.com

Mobile—8240951127/9831313654.