A TECHNICAL UPDATE ON CNX-NIFTY-5.6.2024.

 

CNX-NIFTY

Open-23179.50—High—23179.50—Low—21281.45--Close-21884.50 on 5.6.2024.

Support:21860/21821.05/21801.45/21777.65/21731.40/21727.75/21710.20/21530/21281.65/21137.20/20976.80/20769.50/20507.75/20291.55/20222.45.

Resistance:23110.80/22794.70/22775.20/22526.60/22417/22303.80/22297/22224.35/22126.80/23282/23338.70/23397/23456/23525/23573/23630/23768/23804.

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 22653 and earlier gap point was 22858.50) also and finally ended the day with a colossal loss of 1379.40 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. It is also below its all short term moving averages on the daily & weekly chart and also below the medium term moving averages on the daily chart. It is on a weak technical footing now. But please note that it is still above its last critical support range of 21868----21821.05---21801.45---21777.65---21776.87---21731.40---21727.75 & 21710.20, it broke this range intraday today but managed to close shade above it at the end, if it holds this range on the closing basis and then it may start to move up, else it may head down.    

STRENGTH:-

1. It is in the long term uptrend now. Break below 21868 will threaten the long term uptrend.   

2. It is well above its critical points of 21821.05---21801.45---21777.65---21776.87---21731.40---21727.75 & 21710.20, which is must to keep the up momentum going in the year 2024. Sustained break below this range may witness accelerated fall.

3. It is above its pullback threshold point of 21776.87(figure may change), if it holds above it on the closing basis then there will be a ray of hope that it could stage an up move.

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 22276.50----22819.15----22980.53---23110.80 & 23121.18 and sustain on the closing basis.

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

3. It is below all its medium term moving averages on the daily chart.

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

5. 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.

6. 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.  

7. 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, but since it is holding on to its most critical range of 21868----21821.05---21801.45---21777.65---21776.87---21731.40---21727.75& 21710.20 and if it holds this range 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 holds the range of 21868---21777 for some time with a stop loss of 21700, else avoid.

2. Short trade can be tried on the rise near or within the range of 22380---22450 with a stop loss of 22530 or can sell if it moves below 21700 with a stop loss of 21850. 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

Mobile—8240951127/9831313654.

Email--- suranank@gmail.com