A TECHNICAL UPDATE ON CNX-BANK NIFTY—20.9.2024

 

CNX-BANK NIFTY

Open—52929.25--High—53353.30--Low—52847.90--Close—53037.60 on 19.9.2024.

 

Support:52794.95/52340.25/51996.65/51957.75/51750.10/51636.75/51138.90/51133.20/50938.70/50438.20/49974.75/49659.05/49654.65/49530.45/49057.40/48636.45/48313.60/48292.25/48203.45/48161.75/47435.75/46983.75/46579/46077.85. 

Resistance: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 went up further near its all-time high of 53357.70 but could not cross it and made double top and started to slide down but finally ended the day with a gain of 287.20 points. Since it made double top, therefore now to keep the up momentum on it has to move above 53357.70 and sustain on the closing basis, else it may start to drift down. Furthermore it has been rising straight for the last six days and with each rising day it is vulnerable for correction and the correction could set in any time and after correction completion it could resume the up move again, therefore be alert and watchful, at this point of time. The technical setup looks good for the continuation of the up move. It is out of corrective mode, it is 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 can continue provided it holds the range of 52785.58---52649.30---52618---52480.42 (figures may change) on the closing basis. But break and sustained close below the above range will be a warning signal for the long trade to exit,  sustained close below the range of 51877.15---51778---51674---51639.66----51541(figures may change) may trigger fresh fall and it may see an accelerated down move.

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  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.

It retested its all-time high today but could not cross it and made a double top and then slipped down but moving down if it sustains above 52618 on the closing basis, then it could again retest its all-time high of 53357.70  or may go beyond it also. 

Similarly moving down from here it may find broad support at (for other support points see the table on the upside) 52785.58---52649.30---52618----52480.42----52434----52213-----52161----52151----52060-----51940----51877.15----51861-----51781-----51778----51674-----51639.66-----51579.50----51541----51504----51429-----51351------51349-----51068-----50966-----50527-----50529-----50394---50369-----50178----50174----50090-----49777-----49654------49530----49419----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 each point of 52785.58----52649.30----52618-----52480.42 will push it into correction mode for its recent rise,  break and close below the range of 51877.15----51715----51639.66 will be an alert sign for the long trade to exit, break and sustained close below the range of 51778----51674----51541 may trigger fresh fall and break and close below  50529 may accelerate the fall. Please note that the range of 50178----50174----50090-----49777----49654---49419(figure will change every day) is a very strong bounce back support range, but sustained break and close below the range of 50178----50174----50090 will threaten the long term uptrend and break and close below the range of 49777----49654---49419 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 RANGE OF 52785.58---52649.30---52618---52480.42 (FIGURES MAY CHANGE) ON THE CLOSING BASIS THEN THE UP MOVE CAN EXTEND, ELSE IT MAY START TO DRIFT DOWN. THE LONG-TERM UPTREND IS INTACT AS OF NOW.

STRENGTH: -

1. It is in the long-term uptrend now, but break below 50174 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. Five 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 52785.58----52649.30----52480.42----51639.66----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 52161---52530---51781----51778----51674----51541(figure will change every day), sustained close above this range can extend the up move.

8. It is making 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 on the weekly & monthly chart and negative divergence on the weekly chart.

TRADING CALL: -- 

1. Long trade can be tried on decline near or within the range of 52911----52850 with a stop loss of 52750 for a possible intraday gain, else avoid.

2. Short trade can be tried on the rise near or within the range of 53500---53550 with a stop loss of 53700. 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.