A TECHNICAL UPDATE ON CNX-BANK NIFTY—6.8.2024

 

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CNX-BANK NIFTY

Open—50586.25--High—50747.55--Low—49719.10---Close—50092.10 on 5.8.2024.

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

Resistance:51133.20/51138.90/51749.45/51957/51996.65/52340.25/52547.55/52782.75/52794.95/52817.85/53180.75/53357.70/53477/53503/53575/53633/53773/53913/53970/54070/54139/54257/54365/54604/54815/55097.

OVERALL VIEW: --

It opened with a big down gap and most of the time drifted down during the day and finally ended the day with a whopping loss of 1258.05 points. The gap it created today is still there and if it makes an effort to fill the gap in the next 4-5 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.  Please note that eventually volatility, wild swings, vertical rise and overbought condition has come into play and it had a devastating fall, today. The days fall has jolted the already weak technical setup further; therefore it seems that it may go down further from here. It was already into deep correction mode for its recent rise and now it has slipped into correction for the earlier rise also, furthermore it is also below all its short term moving averages and few medium term moving averages on the daily chart and few below weekly chart also. 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 49717.78----49484----49353----49271----49000---48858.75----48636.45---48292.25---48203.45---47795.89----47533.83(figures may change), it may bounce back from any of these points but break below 49271 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.

Similarly moving up it will face strong resistance at 50337.65—50577.81---50720---51030---51109.05---51133.20---51138.90---51539----51639.66---51722----51825----51968----52012----52499---52630(some figure may change), if it moves above 50337.65 & 50577.81 and sustain on the closing basis then there will be some ray of hope that it may have an up move and if it moves above 52012 and sustain on the closing basis then it may get into up momentum track again, else down move may continue.

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 HOPE OF UP MOMENTUM ALIVE IN THE YEAR 2024 IT HAS TO STAY ABOVE 48636.45---48292.25 & 48203.45 ON THE CLOSING BASIS , ELSE IT MAY WINTESS 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 49271 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. 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(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. All the 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 52000---51825----51542----51536----51309---51275---51178(figure will change every day), sustained break below this range can deepen down move.

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

7. The price action was very weak today.

8. It is well below its pullback threshold point of 50337.65 & 50577.81(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 50577.81, however aggressive traders can try long trade  on decline near or within the range of   49271----49000 with a stop loss of 48800 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 50650---50750 with a stop loss of 50850 or can sell if it remains below 50439 with a stop loss of 50600. 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.