A TECHNICAL UPDATE ON CNX-BANK NIFTY—17.10.2024

 

CNX-BANK NIFTY

Open—51711.20--High—52031.60--Low—51711.20--Close—51801.05 on 16.10.2024.

 

Support: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: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 the open was the low for the day also and thereafter it moved in a range during the day and finally ended the day with a loss of 104.95 points. The overall chart setup is still weak, it is already into the deep correction mode, it is still below few of 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 almost 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. It is important to mention here that the on-going up move is just a pullback rally and can fizzle-out abruptly also, which please note.

The good thing is that it still has short higher top & bottom on the line chart, it is above its correction threshold point of 51598(figure may change) and pullback threshold point of 51202.74(figure may change), which is a positive sign for moving up further. Please note that if it sustains above these points on the closing basis then the broad upside target could be 51827----52331---52835----53459----53613, it may correct at any of these points then either it may resume the up move or the rally may fizzle out for good, 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. But break & close below 51598 will push it into correction mode for its recent rise and break and sustained close below 51202.74 may end the possibility of moving up for the time being and can drag it down to lower levels.  

Please note that to gain a strong foothold it has to move above the range of 51948---52006---42487.43----52496 and sustain on the closing basis, and if it moves above the range of 53204----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 was oversold for some time  but now it is mixed , so the on-going rally may end also because these rallies are weak in nature and may end abruptly 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. So please be alert and cautiously approach the market. 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) 51767------51598-----51498-----51404----51202.74-----50725.76----50792-----50753------50660-----50617--------50358-----50163---49839----49764-----49654.65------49604----49237----49201.72-----48968-----48636.45---48292.25---48203.45---47756(figures may change), it can bounce back from any of these points, It is already into the deep correction mode, break & sustained close below 51598 will push it into  correction mode for its very recent rise but as long as it holds 51202.74 on the closing basis chances of up move will be alive. Please note that the range of 50792-----50753-----50660----50358---50163 and then 49839---49764---49654.65---49604--49237(figure will change every day) is a very strong bounce back support range, but break & sustained close below 50792 will threaten the long term uptrend and thereafter break & close below each point will weaken it further, break and sustained close below 48968 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, LONG TRADE CAN BE TRIED IF IT HOLDS 51598 & 51202.74 LEVELS ON THE CLOSING BASIS (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. Two out of seven important indicators is positive on the daily chart, indicating oversold/overbought condition both.

4. It still has short higher top & bottom on the line chart.

5. It is above its pullback threshold point of 51202.74(figure may change).

6 The price action was positive today.

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. Five 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--- (figures may change). The other important correction threshold points are at 51549.93----51492.11------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 51404---51498---51767----51948---52006---52496(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 51700 with a stop loss of 51550 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 52150---52200 with a stop loss of 52300 or can sell if it moves below 51690 with a stop loss of 51810. 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.