A TECHNICAL UPDATE ON CNX-BANK NIFTY—3.10.2024

 

CNX-BANK NIFTY

Open—52844--High—53235.25--Low—52817.80--Close—52922.60 on 1.10.2024.

 

Support:52794.95/52782.75/52340.25/51996.65/51750.10/51138.90/51133.20/50947.70/50369.40/49974.75/49654.65/49530.45/49057.40/48636.45/48313.60/48292.25/48203.45/48161.75/47435.75/46983.75/46579/46077.85. 

Resistance:53357.70/53741.40/54467.35/54593/54604/54772/54815/54924/55097/55209/55444/55646/55827/56135/56218.

OVERALL, VIEW: --

It opened on a negative note and thereafter had both side moves during the day and finally ended the day with a loss of 55.50 points. Please note that the gap it created on 30.9.2024 is still there and if makes an effort to fill the gap in the next 3-4 trading sessions, which is technically possible then it could come up to 53763.20 but if it fails to fill the gap in the stipulated time then chances of filling the gap will recede for the time being, but it will surely fill the gap one day, which may please be noted. The chart setup has weakened a bit, it is into the correction mode as it is below its correction threshold points and some other key points of 53636.71----53608----53587----53500.30----53363---- 53357.70---53331.55—53283---53092 (figures may change) which is a weak sign. Furthermore it has also  below few of its short term moving averages and some important technical indicators have also turned weak, therefore if it does not bounce back above the aforesaid range and sustain on the closing basis in the shortest possible time, then it may fall further from here. However if it manages to hold the range of 52779----52538----52487.43(figure will change daily) on the closing basis then it could still bounce back, else it may witness an accelerated down move. It is important to mention here that if it closes above 53207.09 (figure may change)and sustain then the chances are that it can extend the up move, if it closes above 53331.55 & 53357.70(figure may change) it may gain strength but it may get into the good up momentum track only once it closes above 53636.71(figure may change) and sustain.

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, it neutralized on the daily chart  but still mildly  overbought, most importantly negative divergence  on the  weekly chart and it appeared on the monthly chart too and sell  mode triggered on the daily chart today all these developments are concerning, therefore, all indication together based on few indicators on the daily, weekly & monthly chart is pointing that it could head down and the process is on and it may slide further, so keep an  eye on for the positive  price action for the possible up rally. It is in the long term uptrend as of now, but the short term bias is down..

Moving down from here it may find broad support at (for other support points see the table on the upside) 52779----52708------52538-----52487.43------52292-----51778----51652-----51549.93----50725.76----50665----50555----50529-----50223-----49877----49654------49201.72-----48636.45---48292.25---48203.45---47795.89----47533.83(figures may change), it can bounce back from any of these points, It slipped into the correction mode today as it closed below its correction threshold points and some other key points of 53636.71----53608----53587----53500.30----53363---- 53357.70---53331.55—53283---53092 (figures may change) which is a weak sign, sustained close below the range of 52779----52538----52487.43(figure will change daily) may accelerate the down move and thereafter close below each point will weaken it further. Please note that the range of 50665----50555----50529-----50223----49877----49654(figure will change every day) is a very strong bounce back support range, but sustained break and close below the range of 50665----50555----50529 will threaten the long term uptrend and break and sustained close below the range of 50223----49877----49654 may accelerate the fall further.

It slipped into the correction mode today therefore it is sell on decline market now in general till it gets out of the correction mode , but both side trades can be tried depending on the price action for intraday gains.  

NOTE: - IT IS INTO CORRECTION MODE NOW, HOWEVER IF IT COULD HOLD THE RANGE OF 52779----52538----52487.43 (FIGURES MAY CHANGE) ON THE CLOSING BASIS THEN IT COULD STILL BOUNCE BACK, ELSE DOWN MOVE MAY CONTINUE. IT IS IN THE LONG TERM UPTREND NOW.

STRENGTH: -

1. It is in the long-term uptrend now, but break below 50555 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. Three out of seven indicators are positive now on the daily chart.

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. Four out of seven important indicators is on the daily, weekly & monthly chart, indicating overbought condition and sell signal also on the daily chart.

4 The price action was weak today.

5. It has already broken its recent bottom of 53968.60 on the line chart.

6. It is into correction mode today as it closed below some of the correction threshold points of 53636.71-----53500.30---53331.55(figures may change). The other important correction threshold points are at 52487.43----52098.30---51549.93----50725.73----49201.72---45416.49 (figure may change) and if it sustain below these points correction will deepen. 

7. It is below some of its short-term moving averages now on the daily chart and the important average range for today is between 53608---53587---53283----53092----52779----52538(figure will change every day), sustained close below this range can accelerate the down move.

TRADING CALL: -- 

1. Long trade can be tried on decline near or within the range of 52550----52490 with a stop loss of 52350 for a possible intraday gain, else avoid. Please note that long trade in a corrective market could be a risky bet but can be tried at critical support point with strict stop loss for intraday gain.

2. Short trade can be tried on the rise near or within the range of 53210---53300 with a stop loss of 53400 or can sell if it moves below 52800 and maintain for some time with a stop loss of 52980 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.