A TECHNICAL UPDATE ON CNX-BANK NIFTY—17.9.2024

 

CNX-BANK NIFTY

Open—52038.70--High—52203.65--Low—51921.45---Close—52153.15 on 16.9.2024.

 

Support:51996.65/51957.75/51750.10/51636.75/51138.90/51133.20/50938.70/50438.20/49974.75/49659.05/49654.65/49530.45/49057.40/48636.45/48313.60/48292.25/48203.45/48161.75/47435.75/46983.75/46579/46077.85. 

Resistance: 52340.25/52794.95/53180.75/53357.70 53477/53503/53575/53633/53773/53913/53970/54070/54139/54257/54365/54604/54815/55097.

OVERALL, VIEW: --

It opened with an up gap and thereafter it had both side moves during the day and in the process it filled today’s gap and finally ended the day with a gain of 215.50 points. The technical setup looks good for the continuation of the up move. It is out of corrective mode, it making higher top & bottom on the line & bar chart again; it is above all its short, medium and long term moving averages on the daily chart. Therefore all together it is pointing that the up move will continue provided it holds the range of 51911.10---51877.15---51774.63---51639.66----51605.94(figures may change) on the closing basis. But break and close below the above range can trigger fall, break and close below the range of 51579.50---51539---51520----51440---51403---51351will weaken it further and break and sustained close below the range of 51319----51266(figure will change daily) may accelerate the fall.

It is important to mention here that it is having see-saw movement quite often with huge volatility, which is not good sign for a steady market, the overbought condition on the weekly and monthly chart is still present but it neutralized on the daily chart a  little while ago but now again in overbought  zone and most importantly negative divergence appeared on the daily and weekly chart is also very concerning, therefore, all indication together based on few indicators on the daily, weekly & monthly chart is pointing that it could head down  in coming days, so keep an  eye on the indicators change and price action for any untoward movement. It is in the long term uptrend now.

Moving up from here its broad resistance points (for in between resistance points see the resistance table above) could be at 52484----52618(some figure may change), it may correct at any of these points, but close above each point will strengthen the up move and finally if it moves above 52618 and sustain on the closing basis then it could retest its all-time high of 53357.70 or may go beyond it also and hit a new high. 

Similarly moving down from here it may find broad support at (for other support points see the table on the upside) 51911.10----51877.15----51774.63---51727----51639.66---51605.94----51579.50----51539----51520----51440---51429---51403----51351----51319---51266----51245----51232---51200----51072-----50803----50737----50630-----50529-----50257----50165-----50060----50043----49963----49717.78----49654------49650-----49530----49331----48858.75----48636.45---48292.25---48203.45---47795.89----47533.83(figures may change), it can bounce back from any of these points, break and sustained close below 51911.10 & 51877.15 will be a warning signal,  break and close below the range of 51774.63---51639.66---51605.94----51579.50---51539-----51520----51440---51403----51351 will be an alert sign for the long trade to exit, break and sustained close below the range of 51319----51266  may trigger fresh fall and break and close below  50529 may accelerate the fall. Please note that the range of 50060----50043----49963-----49654---49650—49333(figure will change every day) is a very strong bounce back support range, but sustained break and close below the range of 50060----50043----49963 will threaten the long term uptrend and break and close below the range of 49654---49650—49333 will trigger fresh fall, and finally sustained break and close below the range of 48636.45---48292.25 &48203.45 will trigger fresh fall again and that could be sharp in the intensity and  the correction could be more painful time-wise and price-wise both.

Since it is out of correction mode therefore it is buy on decline market in general, but both side trades can be tried depending on the price action for intraday gains.  

NOTE: - IF IT HOLDS THE LEVEL OF 51877.15 ON THE CLOSING BASIS THEN THE UP MOVE CAN EXTEND, ELSE IT MAY START TO DRIFT DOWN AGAIN. THE LONG-TERM UPTREND IS INTACT AS OF NOW.

STRENGTH: -

1. It is in the long-term uptrend now, but break below 50060 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. Six out of seven indicators are positive now.

4. It is well above its pullback threshold point of 50529(figure can change), if it holds above, it on the closing basis then it may continue the up-move.

5 The price action was positive today.

6. It is got out of all corrective mode today and the important correction threshold points are 51911.10---51774.63---- 51639.66----51605.94---51250.53---50702.16----49877.99---48353.95 & 44568.72 and if it sustain above these points it may have smooth continuation of the up move. 

7. It is above all its short-term moving averages now on the daily chart and the important average range for today is between 51539---51520---51440----51403----51319----51266(figure will change every day), sustained close above this range can extend the up move.

8. It is has made higher top & bottom on the line & bar chart now.                                 

WEAKNESS: -

1. 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.

2. 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.

3. Two out of seven important indicators is negative on the daily chart, indicating overbought condition and negative divergence.

TRADING CALL: -- 

1. Long trade can be tried on decline near or within the range of 51911----51877 with a stop loss of 51600 or can buy if it moves above 52224 and maintain for some time with a stop loss of 52050 for a possible intraday gain, else avoid.

2. Short trade can be tried on the rise near or within the range of 52400---52450 with a stop loss of 52600. 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.