A TECHNICAL UPDATE ON CNX-BANK NIFTY—5.8.2024

 

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CNX-BANK NIFTY

Open—51172.25--High—51608.70--Low—51087.85---Close—51350.15 on 2.8.2024.

Support:51138.90/51133.20/50438.30/49974.75/49530.45/49057.40/48636.45/48313.60/48292.25/48203.45/48161.75/47435.75/46983.75/46579/46077.85.                           

Resistance:51749.45/51957/51996.65/52340.25/52547.55/52782.75/52794.95/52817.85/53180.75/53357.70/53477/53503/53575/53633/53773/53913/53970/54070/54139/54257/54365/54604/54815/55097.

OVERALL VIEW: --

It opened on a negative note and thereafter had both side moves during the day and finally ended the day with a loss of 213.85 points. It is still into deep correction mode for its recent rise as it is well below  all its correction threshold points of 53036.49----52834.06---52454.47---52167.20----51891.39---51853.33 & 51639.66 .Furthermore it is also below all its short term moving averages and few medium term moving averages on the daily chart and also below some key points which are placed at 52029---51996.65----51957---51713---51694---51580---51494---51432( some figures will change daily) for the day and finally  almost all  the important technical indicators are negative on the daily chart  & few indicators are also weak on the weekly & monthly chart, and volatility  and wild swings is also a concern, therefore all together it is still showing gross weakness and overbought condition and it is pointing that it may be heading for a big fall in coming days. But the good thing is that it is still above its pullback threshold point of 50994.45(short) & 51127.28(deep)(figure may change) and two other important points of 51138.90----51133.20 & 50818.69 and if it sustains above these points and price action improves then the chances of continuation of the up move will be alive, else it may head down further. The price action was very weak today. Please note that it will gain strong foothold for the continuation of the up move if it moves above 51639.66 and  sustains on the closing basis, but it will gain good strength only if it moves above 52040 (figure will change daily) and sustain on the closing basis. Please note that chances of the continuation of the up move will be alive till it holds 51127.28---50994.45 & 50818.69 on the closing basis, else it may start to drift down, which please note.  It is important to mention here that moving down the next key support point will be at 49242(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. Since it is into correction mode therefore it is still sell on the rise market in general but both side trade can be tried depending on the price action for intraday gains.  

NOTE: - TO KEEP THE UP MOMENTUM ALIVE IN THE MONTH OF AUGUST-2024 IT HAS TO MOVE AND SUSTAIN ABOVE 51534. & 51672.60 ON THE CLOSING BASIS AND TO KEEP THE HOPE ALIVE FOR THE CONTINUATION OF THE UP IT HAS TO HOLD ABOVE 51138.90---51133.20---51127.28---50994.45 & 50818.69 ON THE CLOSING BASIS, ELSE IT MAY HEAD DOWN FURTHER, IF IT FAILS TO GIVE SHARP AND SUSTAINABLE BOUNCE BACK AND MOVES ABOVE FEW OF ITS CRITICAL POINTS IN A SHORTEST POSSIBLE TIME THEN IT MAY BEGIN TO SLIDE DOWN FURTHER. 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, but break below 49242 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. It is above its pullback threshold point of 50994.45 & 51127.28(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.

4. Three out of seven indicators are positive on the daily chart.

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(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. Five 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 52040---51953----51713----51694----51580---51494---51432(figure will change every day), sustained break below this range can trigger big down move.

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

7. The price action was very weak today.

TRADING CALL: -- 

1. Long trade can be tried on decline near or within the range of   51145----51000 with a stop loss of 50790 or can buy if it moves above 51570 and maintain for some time with a stop loss of 51330 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 51650---51750 with a stop loss of 51900 or can sell if it moves below 50860 with a stop loss of 51145. 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.