A TECHNICAL UPDATE ON CNX-BANK NIFTY—14.10.2024

 

CNX-BANK NIFTY

Open—51491.90--High—51560--Low—51005.85--Close—51172.30 on 11.10.2024.

 

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 negative note and thereafter had both side moves during the day and finally ended the day with a loss of 358.60 points. The chart setup is still weak it is already into the deep correction mode now. Furthermore after staying 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, for just one day ,it slipped below these points again today which shows good weakness in it. Please note for a decent pullback rally it has to move above 51202.74 & 51350.12 and sustain on the closing basis, else down move may continue.

It is important to mention here that overall chart setup is weak, 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 the only positive point is that  it has made  higher top & bottom on the line chart , but to give a ray of hope for the good up move  it has to closes above its key points of  51202.74 & 51350.12 (figure may change) and sustain on the closing basis, and to gain strong foothold it has to move above the range of  51397---51708----51825----51985---52202----52487.43---52533 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  but these rallies are weak in nature and may end abruptly 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 and may seek much lower levels. It is in the long term uptrend as of now 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) 50725.76----50720-----50704------50617----50600----50300-----50085---49774----49702-----49654.65------49546----49201.72-----49166----48908-----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 and in short correction mode also for its recent rise, therefore likely to go down further. Please note that the range of 50720-----50704-----50600----50300---50085 and then 49774---49702---49654.65---49546--49166(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 48908 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, FOR SAFE TRADERS IT IS SUGGESTED TO AVOID LONG TRADE FOR THE DAY IF IT MAINTAINS BELOW 51202.74 & 51350.12(FIGURE MAY CHANGE) . 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. It still has short higher 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----51350.12 (figures may change). The other important correction threshold points are at 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 51397---51708---51825----51985---52202---52533(figure will change every day), sustained close below this range can accelerate the down move.

5. It is below its pullback threshold point of 51202.74(figure may change) is a weak sign.

6 The price action was weak today.

TRADING CALL: -- 

1. Long trade can be tried on decline near 51000 with a stop loss of 50870 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 51550---51650 with a stop loss of 51750 or can sell if it moves below 51000 and maintain for some time with a stop loss of 51200. 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.