A TECHNICAL UPDATE ON CNX-BANK NIFTY—12.8.2024

 

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CNX-BANK NIFTY

Open—50612.10--High—50707.75--Low—50386.45---Close—50484.50 on 9.8.2024.

Support:50438.20/49974.75/49659.05/49530.45/49057.40/48636.45/48313.60/48292.25/48203.45/48161.75/47435.75/46983.75/46579/46077.85.                           

Resistance:51133.20/51138.90/51749.45/51957.75/51996.65/52340.25/52547.55/52782.75/52794.95/52817.85/53180.75/53357.70/53477/53503/53575/53633/53773/53913/53970/54070/54139/54257/54365/54604/54815/55097.

OVERALL VIEW: --

It opened on a big positive note and thereafter had both side moves and finally ended the day with a gain of 327.80 points. But the weakness still persists. The gap it created on 5.8.2024 is still there and if it makes an effort to fill the gap in the next 1 trading sessions which is technically possible then it can come up to 51087.85, but if it fails to fill the gap in the stipulated time then the chances of filling the gap will recede for the time being but one day if will fill the gap for sure, which please keep in mind. The technical setup is weak, furthermore the volatility is still there and the overbought condition on the weekly and monthly chart is also present but it has neutralized on the daily chart to some extent, therefore it seems that it may go down further from here may be with in- between short relief rallies. It is already into deep correction mode for its recent rise and also into correction for the earlier rise; furthermore it is below all its short term moving averages on the daily & below few on the weekly chart and also below few medium term moving averages on the daily chart. Furthermore almost all important technical indicators are negative on the daily chart and few on the weekly & monthly chart are also negative, pointing that the down move is likely to continue. Moving down from here it may find  good support at 50292—49800----49717.78----49659----49530----49371----49322-----49167-----49029---48853.755----48636.45---48292.25---48203.45---47795.89----47533.83(figures may change), it may bounce back from any of these points, please note that if it holds 50292(short pullback threshold point) on the closing basis then there is a feeble chance that it can extend the up move, the range of 49400----49373----49232----49063 is a very strong bounce back support range, but sustained break and close below 49373 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 that could be sharp in the intensity and then the correction could be more painful time-wise and price-wise both. Sustained close below 47533.83 can drag it down to 46077 or lower.

Similarly moving up it will face strong resistance at 50532---50683---51000---51072---51316-51378-----51508---51569-----51553.40---51639.66---51672.60----51708----51804----51945----52340----52485----52618(some figure may change), if it moves above 50532(strong pullback threshold point) and sustain on the closing basis then there will be a strong chance that it can extend the up move if it moves above 51378 & 51639.66 and sustain on the closing basis then it may get into the strong up momentum track again  , else down move may continue.

Since it is into correction mode therefore it is still sell on the rise market and sell on the price breakdown in general but both side trades can be tried depending on the price action for intraday gains. Please note that since it is into deep correction mode therefore buy trade could be a risky affair.

NOTE: - IF IT SUSTAIN ABOVE 50292 ON THE CLOSING BASIS THEN IT CAN POSSIBLY EXTEND THE UP MOVE. BUT TO KEEP THE HOPE OF UP MOMENTUM ALIVE IN THE YEAR 2024 IT HAS TO STAY ABOVE 49373----48636.45---48292.25 & 48203.45 ON THE CLOSING BASIS, ELSE IT MAY WITNESS AN ACCELERATED FALL. THE LONG TERM UPTREND IS STILL INTACT BUT SHORT TERM TREND IS BEARISH AS OF NOW.

 STRENGTH:-

1. It is in the long term uptrend now, but break below 49373 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.

3. The price action was positive today.

4. One out of seven indicators is positive now, pointing slightly oversold condition, so it may have short relief rally nothing much positive.

5. It is above its feeble pullback threshold point of 50292 (figure may change).  Please note that if it sustains above it on the closing basis then it could possibly move ahead further, else down move may continue.

WEAKNESS:-

1. It is already into deep correction mode now as it is below all its important correction threshold point of 53036.49---- 52834.06----52454.47---52167.20---51891.39---51853.33--- 51639.66----51250.53-----50702.16 & 49878(figure may change), which is a very weak sign.                                                       

2. 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.

3. 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.

4. Six out of seven important technical indicators are negative on the daily chart now.

5. It is below  all its short term moving averages now on the daily chart and the important average range for today is between 51378---51084----50960----50798----50688---50511(figure will change every day), sustained close below this range can deepen the down move.

6. It still has lower top & bottom on the line & bar chart.

7. It is below its strong pullback threshold point of 50532 (figure may change). Please note that if it moves and sustains above it on the closing basis then it could possibly move ahead further, else down move may continue.

TRADING CALL: -- 

1. Safe traders should avoid long trade till it closes above 50532; but can try long trade if it holds 50438.30 for some time with a stop loss of 50280, however aggressive traders can try long trade on decline near 50292 with a stop loss of 50100 or can try if it moves above 50565 and maintain for some time with a stop loss of 50380 for possible intraday 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 50800---50850 with a stop loss of 50950 or can sell if it remains below 50290 with a stop loss of 50540. 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.