A TECHNICAL UPDATE ON CNX-BANK NIFTY—11.10.2024

 

CNX-BANK NIFTY

Open—51195.70--High—51659.45--Low—51047--Close—51530.90 on 10.10.2024.

 

Support: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:51750.10/51996.65/52340.25/52782.75/52794.95/53357.70/53741.40/54467.35/54593/54604/54772/54815/54924/55097/55209/55444/55646/55827/56135/56218.

OVERALL, VIEW: --

It opened on a positive note and thereafter had both side moves during the day and finally ended the day with a good gain of 523.90 points. The stipulated time for filling the gap it created on 30.9.2024 & 3.10.2024(gap figure is 52817.80 7 53763.20) is over therefore chances of filling the gap has receded for the time being but it will fill the gap one day for sure, which may please be noted. The chart setup is still weak it is already into the deep correction mode now. But the good thing is that it closed above its pullback threshold point of 51202.74(figure may change) and its correction threshold point of 51350.12(figure may change) for its recent rise, which is a positive sign, and if it sustains above it on the closing basis then the up move can extend and the broad upside target could be 51827---52331----52835----53459----53613(figure may change), it can correct at any of these points, but if it moves above 53613 and sustain on the closing basis then it could retest its all-time high of 54467.35 or may go beyond it also. Please note that break & sustained close below 51350.12 & 51202.74 will trigger down move again.

It is important to mention here that although it showed some strength today as it closed above its key point as mentioned above, but it is still below all its short term moving averages and below few medium term moving averages on the daily chart and below few short term moving averages on the weekly chart also and all the important technical indicators are negative now, therefore all developments together indicates that further fall looks inevitable in coming days with in between relief rallies. But please note that it has made short higher top & bottom on the line chart and closed above its two key points of 51202.74 & 51350.12 (figure may change),which is a positive sign, therefore as long as it holds these points chances of the up move is alive and it can extend the up rally, but to gain strong foothold it has to move above the range of  51574---51827----52071----52145---52334----52487.43---52563 and sustain  on the closing basis, and if it moves above the range of 53331.55-----53357.70----53500.30(figure may change) and sustain on the closing basis it may gain good strength for the continuation of the up move and it will get into the good up momentum track if it moves above 53613 & 53636.71(figure may change) and sustain on the closing basis.

It is important to mention here that it is having a 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  on the daily chart  it is in the oversold zone now, so it may stage a relief  rally and it is on but the  fear of abrupt end of the rally is always there because the overall technical setup is weak and most importantly  huge negative divergence  is there on the daily& weekly chart and it appeared on the monthly chart too and sell  mode also triggered on the daily & weekly chart , so all together 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 in coming days once this  pullback rally ends. It is in the long term uptrend but the short & medium term bias is bearish as of now.

Moving down from here it may find broad support at (for other support points see the table on the upside) 51350.12----51202.74----50725.76----50700-----50695------50617----50593----50289-----50064---49756----49737-----49654.65------49527----49201.72-----49145----48888-----48636.45---48292.25---48203.45(figures may change), it can bounce back from any of these points, It is already into the deep correction mode, break and sustained close below 51350.12 & 51202.74 may trigger fall. Please note that the range of 50700-----50695-----50593----50289---50064 and then 49756---49654.65---49527--49145(figure will change every day) is a very strong bounce back support range, but break & sustained close below 50700 will threaten the long term uptrend and thereafter break & close below each point will weaken it further, break and sustained close below 48888 will potentially threaten the long term uptrend and finally if it break the range of 48636.45---48292.25---48203.45---47756 and sustains on the closing basis then the correction could be more painful price-wise & time-wise both.

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

NOTE: - IT IS INTO DEEP CORRECTION MODE, BUT IF IT HOLDS 51350.12 & 51202.74(FIGURE MAY CHANGE) LEVELS ON THE CLOSING BASIS THEN THE UP MOVE CAN EXTEND. IT IS IN THE LONG TERM UPTREND AS OF NOW, BUT SHORT TERM BIAS IS BEARISH.

STRENGTH: -

1. It is in 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. One out of seven important indicators is positive on the daily chart, indicating oversold condition.

4 The price action was mixed today.

5. It has made a short top & bottom on the line chart.

WEAKNESS: -

1. 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.

2. Six out of seven important indicators on the daily chart are negative and in sell mode, given negative divergence, but in oversold zone now, so it may give a relief rally before sliding down further as it did today. Please note that indicators, on the weekly & monthly chart, also indicating overbought condition, sell signal and negative divergence too.

3. It is into correction mode today as it closed below some of the correction threshold points of 53636.71-----53500.30---53331.55--52487.43---52098.30---51549.93---- (figures may change). The other important correction threshold points are at 51350.12-----50725.73----49201.72---45416.49 (figure may change) and if it sustain below these points correction will deepen. 

4. It is below some of its short-term moving averages now on the daily chart and the important average range for today is between 51574---51827---52071----52145---52334---52563(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 51350----51210 with a stop loss of 50980 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 51990---52100 with a stop loss of 52220. 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.