A TECHNICAL UPDATE ON CNX-BANK NIFTY—5.9.2024

 

CNX-BANK NIFTY

Open—51364.65--High—51503.55--Low—51259.90---Close—51400.25 on 4.9.2024.

Support: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:51749.45/51957.75/51996.65/52340.25/52794.95/53180.75/53357.70

OVERALL, VIEW: --

It opened on a negative note and thereafter it had both side moves during the day and finally ended the day with a loss of 288.85 points. The technical setup has improved but still not up to the mark, yesterday it closed above its most important and key point of 51579.50 & 51639.66 and today it closed below it again, which is a weak sign. However moving down if it holds 51351 levels it could still bounce back, else it may start to drift down. Please note that to keep the up momentum on in the month of September-2024 it has to sustain above 51351---51579.50----51639.66 and for an accelerated up move it has to move above 51877.15 and sustain on the closing basis. Please note that break and sustained close below 51351 will be a potential alert point for going down and finally  break and sustained close below the range of 51255.57---51252----51238---51143----51097---51056---50938----50789(figure may change)  may witness an accelerated fall.

It is important to mention here that although technical setup has improved a bit and it is looking good for the continuation of the up on the daily chart and it has positive divergence , but it is still into correction mode for its earlier rise ( it will get out of corrective mode if it closes above 51639.66 and sustain); furthermore, the volatility is still there and the overbought condition on the weekly and monthly chart is also there but it neutralized on the daily chart little while ago but now again it is in the overbought territory, therefore, all indication together based on few indicators on the daily, weekly & monthly chart is pointing that it is overbought and could head down in coming days provided it breaks the key levels as mentioned above and price action weakens. So be watchful and alert at this point of time.

Moving up from here its broad resistance points(for in between resistance points see the resistance table above) could be at  51579.50---51639.66----51706----51803----51877.15----51943----52340----52484----52618(some figure may change), it may correct at any of these points, but if it moves above 51579.50---51639.66----51877.15 and sustain on the closing basis then it may accelerate the up move  and thereafter closing 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 good support at 51351---51314----51252----51238-----51143---51138----51133-----51097----51070-----51065----51056----50997---50938----50811----50789----50743------50681------50529---50324---50289—--49855---49836----49717.78----49763-----49659----49655------49530----49452---48853.755----48636.45---48292.25---48203.45---47795.89----47533.83(figures may change), it can bounce back from any of these points, but break and close below 51351 will be an alert sign, break and close below the range of 51255.57---51252----51238---51143----51097---51056---50938----50789 (figure may change) may accelerate the fall and thereafter break below each point will weaken the setup further. Please note that the range of 49855----49836----49763----49654---49452 is a very strong bounce back support range, but sustained break and close below this range will trigger fresh fall and will also 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 again and that could be sharp in the intensity and then the correction could be more painful time-wise and price-wise both.

Since it is into correction mode therefore it is still sell on the rise market and sell on the price breakdown in general but both side trades can be tried depending on the price action for intraday gains. Please note that since it is into deep correction mode therefore buy trade could be a risky affair, therefore one should be extra alert in the long trade.

NOTE: - IF IT HOLDS THE LEVEL OF 51351 ON THE CLOSING BASIS THEN IT CAN STILL BOUNCE BACK , CLOSE BELOW THIS MARK MAY BE AN ALERT SIGN FOR GOING DOWN. THE LONG-TERM UPTREND IS STILL INTACT AS OF NOW. BUT IN SHORT TERM IT IS IN THE CORRECTIVE MODE.

STRENGTH: -

1. It is in the long-term uptrend now, but break below 49836 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, pointing that it could extend the up move and indicate that it could head to 52280 levels or more as of now.

4. It is well above its pullback threshold point of 50289 & 50529(figure can change), if it holds above, it on the closing basis then it may continue the up-move.

5. It is making higher top & bottom on the line after a long time & higher top on the bar chart.

6. It is above most of its short-term moving averages now on the daily chart and the important average range for today is between 51349---51252----51238----51097----51056---50789(figure will change every day), sustained close above this range can extend the up move.

7 The price action was mixed today.

WEAKNESS: -

1. It is already into deep correction mode now as it is below its important correction threshold point of 51639.66 (figure may change), the other correction threshold points are 51255.57-----51250.53-----50702.16---49877.99 & 48353.95, and it is above these points, sustained close below the threshold points is a 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. Two out of seven important indicators is negative on the daily chart, indicating overbought condition.

TRADING CALL: -- 

1. Long trade can be tried if it holds the range of 51351----51260 for some time with a stop loss of 51100 or can buy if it moves above 51467 and maintain for some time with a stop loss of 51240 for a possible intraday gain, 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 51850 or can sell if it moves below 51143 with a stop loss of 51360 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.