A TECHNICAL UPDATE ON CNX-BANK NIFTY—26.7.2024

 

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CNX-BANK NIFTY

Open—50762.30--High—51006.10--Low—50559.90---Close—50888.75 on 25.7.2024.

Support:50784.25/49974.75/49530.45/49057.40/48636.45/48313.60/48292.25/48203.45/48161.75/47435.75/46983.75/46579/46077.85.                            

Resistance:51133.20/51138.90/51749.45/51957/51996.65/52246.70/52342.25/52351.15/52794.55/53180.75/53357.70/53477/53503/53575/53633/53773/53913/53970/54070/54139/54257/54365/54604/54815/55097.

OVERALL VIEW: --

It opened on a negative note and thereafter had both side moves during the day and finally ended the day with a loss of 428.25 points. The chart setup has terribly weakened as it  below it most important and critical key support range points of 53036.49----52834.06---52454.47----52423---52279----52186---52093---52080------52000----51996.65----51957----51639.66-----51220.18----51138.90 & 51133.20 (figures may change), furthermore , it is already into deep correction mode for its recent rise, it is below all its short term moving averages and below few medium term moving averages also on the daily chart and also below few short term moving averages on the weekly chart also, all  the important technical indicators have turned negative on the daily chart, so all together it is showing gross weakness and pointing that it may be heading for a big fall in coming days  if it remains below 51639.66 on the closing basis. Please note that if it moves above 51220.18 (figure may change) and sustain on the closing basis then the chances are that it can give a good relief rally and may resume the up move again but it will gain strength only if it moves above 52325 (figure will change daily) and sustain on the closing basis, else down move may continue. It is important to mention here that moving down from here the next key support point is at 49001(figure will change daily, for in between support points please look at the above mentioned support points) break below it will threaten the long term uptrend and finally sustained break and close below the range of 48636.45---48292.25 &48203.45 will trigger fresh fall and it could be sharp in the intensity and then the correction could be painful time-wise and price-wise both. I once again repeat that all the important technical indicators on the daily chart have turned weak and some indicators on the weekly and monthly chart are also weak and showing overbought condition, which indicates that it may deeply correct in the coming days/week/months and can head down to 49700 or lower levels, but please note that if price action remains good there is no major threat for it to move down and the price action has been consistently weak for the last few days and it was very weak today also, so keep an eye on the price action for further direction. Since it is into correction mode therefore it is sell on the rise market in general but both side trade can be tried depending on the price action for intraday gains.  

NOTE: - IF IT FAILS TO MOVES ABOVE 51220.18 & 51639.66 AND SUSTAIN ON THE CLOSING BASIS IN THE NEXT 1-2 TRADING SESSIONS THEN THE DOWN MOVE MAY CONTINUE, ELSE IT MAY HAVE A RELIEF RALLY. SHORT TERM TREND IS BEARISH.

  STRENGTH:-

1. It is in the long term uptrend, but break below 49001 will threaten the long term uptrend.

2. It is well above 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.

WEAKNESS:-

1. The price action was very weak today.

2. It is already into deep correction mode now as it is below all its threshold point of 53036.49---- 52834.06----52454.47 & 51639.66 (figure may change), which is a very weak sign.                                                       

3. Some important technical indicators are weak and overbought on the daily/weekly and monthly chart and pointing that it could head down in the coming days/weeks and months.

4. Volatility and wild swing 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.

5. All the seven important technical indicators are negative on the daily chart now.

6. It is below all its short term moving averages now on the daily chart and the important average range for today is between 52325---52134----52056----51894----51874---51844(figure will change every day), sustained break below this range can trigger big down move.

7. It has made lower top & bottom on the line & bar chart.

8. It is below its pullback threshold point of 51220.18(figure may change). Please note that if it moves above it and sustain on the closing basis then it could possibly move ahead further, else down move may continue..

TRADING CALL: -- 

1. Long trade can be tried on decline near 50560 with a stop loss of 50400 for possible pullback gains, else avoid. Please note that long trade in a corrective market could be a risky affair but can be tried near critical support points for intraday gains. 

2. Short trade can be tried on the rise near or within the range of 51220---51335 with a stop loss of 51500 or can sell if it moves below 50760 with a stop loss of 51000. 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.