A TECHNICAL UPDATE ON CNX-BANK NIFTY—5.6.2024

 

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CNX-BANK NIFTY

Open—50667.05--High—50667.05--Low—46077.85---Close—46928.60 on 4.6.2024.

Support: 46579.05/45828.80/45661.75/44633.55/44429.                            

Resistance:46983.25/47340.35/47435.25/48203.45/48292.25/48313.60/48381.95/48636.45/49057.40/49688.85/49974.75/50153.81/50467.77/50889.65/51133.20/51470/51823/51969/52218/52966.

It opened with a down gap and the open was the high also for the day and thereafter it plunged down sharply and in the process it filled the yesterdays gap (gap point was 49122) also and finally ended the day with a colossal loss of 4051.35 points. As expected it could not hold on to its yesterdays gain and erased it completely in fact registered fresh losses and had a wild swing during the day, which is a negative indication. It slipped into deep correction mode for its recent rise and for its earlier rise also. Furthermore it slipped below its most critical points of 48636.45---48292.25 &48203.45, please note that to keep the up momentum going in the year 2024 it has to stay above these points, else it could keep the down move on and most importantly it slipped below its last key point of 46983.25 and if it sustains below it on the closing basis then it could head to much lower levels and then the correction could be more painful price-wise and time-wise both which may please be noted. So to give a foothold it has to move above 46983.25 and sustain.       

STRENGTH:-

1. It is still in the long term uptrend, but today it has threatened it as it closed below its threshold point of 47302 and sustained break below 45896 may jeopardize the long term uptrend.

2. Moving down from here the possible good bounce back point could be at 46579.05----45896----45828.80-----45661.75----44633.85-----44429 (figure may change) break below each point could weaken it further.

WEAKNESS:-

1. It slipped into deep correction mode for its earlier and its recent rise and it will get out of all corrective mode once it moves above 48178.61---49002.64----49551---50153.81 &50467.77 and sustain on the closing basis.

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

3. It closed below its last critical support point of 46983.25 and if it sustains below it then it could witness drastic fall in coming days.

4. It is way below its all short term moving averages on the daily and weekly chart and few below monthly chart also.

5. It is below all its medium term moving averages and below one long term average also which is placed at 47302(figure will change every day) for the day.

6. It is below its pullback threshold point of 47271(figure may change),if it moves above it and sustain on the closing basis then there will be a ray of hope that the up move can extend.

7. It has broken all tops & bottoms on the line chart and bar chart at one go today.

8. Some important technical indicators are weak on the daily/weekly and monthly charts and pointing that it could head down to lower levels in coming days/weeks and months.

9. Volatility can be seen in the market quite often, which is not a good sign for a steady market condition and it can eventually drag it down may be drastically in the coming days/weeks and months. So be watchful.  

10. The price action has been mixed for the last few days and today it was terribly weak.

OVERALL VIEW: -- It had a nerve wrecking fall today which has devastatingly jolted the technical chart setup and slipped into deep correction mode for its earlier and recent rise and indicates further fall may be ahead, however if it moves above 46983.75---47271 & 47302(figure may change) and sustain on the closing basis then the fall may be arrested and it may gain some strength for the up move., else it may continue to move down. Since it is in deep corrective mode therefore it is sell on the rise market now in general ,but long trade can also be attempted at crucial and critical support point with strict stop loss for pullback gains.

TRADING CALL: --                                                                   

1. Long trade can be tried if it moves above 46983.75 with a stop loss of 46800 for pullback gains, else avoid.

2. Short trade can be tried on the rise near or within the range of 47950---48100 with a stop loss of 48300 or can sell if it remains below 46983.75 with a stop loss of 47350.  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.