A TECHNICAL UPDATE ON CNX-BANK NIFTY—23.9.2024

 

CNX-BANK NIFTY

Open—52235.80--High—54066.10--Low—53037.60--Close—53793.20 on 20.9.2024.

 

Support:53357.70/52794.95/52782.75/52547.55/52340.25/51996.65/51957/51877.15/51750.10/51138.90/51133.20/50947.70/50438.20/50369.40/49974.75/49659.05/49688.85/49654.65/49530.45/49057.40/48636.45/48313.60/48292.25/48203.45/48161.75/47435.75/46983.75/46579/46077.85. 

Resistance:53913/53984/54066.10/54139/54283/54365/54593/54604/54772/54815/54924/55097/55209/55444/55646/55827/56135/56218.

OVERALL, VIEW: --

It opened on a big positive note and went up further and hit a new all-time high of 54066.10 and finally ended the day with a robust gain of 755.60 points. It is important to mention here that it has been vertically rising straight for the last seven days (on closing basis it is up by 2783 points & on intraday basis by 3119 points) and with each rising day it is becoming very vulnerable for correction, therefore correction could set in any time and if it keeps on rising for another few days then it may have vertical fall also, therefore be alert and watchful, at this point of time. The technical setup is extraordinarily strong for the continuation of the up move, but the vertical rise & volatility is a huge concern. It is making higher top & bottom on the line & bar chart; it is above all its short, medium and long term moving averages on the daily, weekly & monthly chart. Therefore all together it is pointing that the up move can continue provided it holds the range of 53357.70--53330.16---53193.75---53025 (figures may change) on the closing basis, break and sustained close below 53330.16 will push it into correction mode and thereafter close below each point will deepen the correction, sustained close below the range of 52527---52375---52180.87---52103(figure will change daily) will trigger fresh fall and sustained close below the range of 51992---51921---51876---51684 (figures may change) may accelerate the 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, sell mode still there  on the  weekly chart is very concerning, therefore, despite the recent robust rise ,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.

Similarly moving down from here it may find broad support at (for other support points see the table on the upside) 53357.70----53330.16----53193.75----53025---52875----52654----52527---52507----52375---52218----52180.87----52139----52103----51992---51876----51782-----51684----51571-----51242-----51109----50947----50369----50235----50223----50148-----49829-----49654------49530----49495----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 53357.70--53330.16---53193.75---53025 will push it into correction mode for its recent rise and correction will deepen below each point,  break and close below the range of 52527---52375---52180.87---52103 may trigger fresh fall and break and close below the range of 51992---51921---51876---51684  may accelerate the fall. Please note that the range of 50235----50223----50148-----49829----49654---49495(figure will change every day) is a very strong bounce back support range, but sustained break and close below the range of 50235----50223----50148 will threaten the long term uptrend and break and close below the range of 49829----49654---49495 may accelerate the fall further.

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 53357.70--53330.16---53193.75---53025 (FIGURES MAY CHANGE) ON THE CLOSING BASIS THEN THE UP MOVE CAN EXTEND, ELSE IT MAY CORRECT. IT IS IN THE LONG TERM UPTREND AS OF NOW.

STRENGTH: -

1. It is in the long-term uptrend now, but break below 50223 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. Four out of seven indicators are positive now.

4 The price action was positive today.

5. It is out of all corrective mode and the important correction threshold points are 53330.16----53193.75----53025.25----52180.87----51791.74----51243.37----50419.20----48895.16----45109.94(figure may change) and if it sustain above these points it may have smooth continuation of the up move, break below each point will make the correction deeper. 

6. It is above all its short-term moving averages now on the daily chart and the important average range for today is between 52527---52375---52103----51992----51876----51684(figure will change every day), sustained close above this range can extend the up move.

7. 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. Three out of seven important indicators are negative on the daily chart, indicating overbought condition on the weekly & monthly chart also, sell mode and negative divergence on the weekly chart. So watch for indicators improvement.

TRADING CALL: -- 

1. Long trade can be tried on decline near or within the range of 53536----53330 with a stop loss of 53000 for a possible intraday gain, else avoid.

2. Short trade can be tried on the rise near or within the range of 54350---54450 with a stop loss of 54600 or can sell near 54066 if it does not move above it in first hour of trade with a stop loss of 54220. 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.