A TECHNICAL UPDATE ON CNX-BANK NIFTY—17.5.2024

 

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CNX-BANK NIFTY

Open—47945.85--High—48052.90--Low—47340.35---Close—47977.05 on 16.5.2024.

Support:47737.20/47313.35/47279.80/46919.70/46579.05/46529.05/45828.80.                           

Resistance: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 exhibited huge volatility and had both side wild swings during the day and finally ended the day with a gain of 289.60 points. It is still into correction mode for its earlier rise, but today it bounced back above its correction threshold point of 47800.46(figure may change) for its recent rise and its pullback threshold point of 47689.25(figure may change) and closed above it, which is a positive sign and if it sustains above it on the closing basis then the up move can extend, else it may head down again.

STRENGTH:-

1. It is in the long term uptrend as of now. But break below 46932 will threaten the uptrend.  

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

3. It is above its pullback threshold point of 47689.25(figure may change) and if it sustains above it on the closing basis then the rally can extend further and the possible upside target or resistance points could be at 48126---48203---48292---48479---48636.45—48832---49269----49377.

4. Moving down the possible good bounce back point could be at 47800.46---47737.20---47689.25----47380---47258---46932---46579.05(figure may change), break below 47800.46 will push it into correction mode its very recent rise, break below 47689.25 may end the on- going up move,  sustained break below 46932 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 46932 &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.

5. It has made short higher top and bottom on the line chart now.

6. The price action was more or less was o.k. today.

WEAKNESS:-

1. It is into deep correction mode now for its earlier rise and it will get out of it, if it moves above 49173.36 & 49446.69 and sustain on the closing basis.

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 48200---48165---48053(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 has broken its earlier major bottom on the line and bar chart.

6. 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.

7. Huge volatility is there in the market, which is not a good sign for a steady market and it can eventually drag it down may be drastically in the coming days/weeks and months.

OVERALL VIEW:--The overall technical setup is still weak, but since it bounced above its critical point of 47689.25 &47800.46 and if it hold these points on the closing basis then the up move can extend with intermittent correction. Since it is in correction mode but the pullback mode is also on therefore both side trades can be attempted depending on the price action. But please note that long trade amid volatility and in a corrective market could be a risky affair, so be alert and watchful in your trades. The long term trend is still up, but the short term bias is negative as of now.

TRADING CALL: --                                                                    

1. Long trade can be tried on decline near or within the range of 47800----47750 with a stop loss of 47650 or if it moves above 48055 and maintain for some time with a stop loss of 47740.

2. Short trade can be tried on the rise near or within the range of 48350 —48400 with a stop loss of 48530 or can sell below 47650 with a stop loss of 47820.  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.