A TECHNICAL UPDATE ON CNX-BANK NIFTY—21.10.2024

 

CNX-BANK NIFTY

Open—51261--High—52199.45--Low—51000.90--Close—52094.20 on 18.10.2024.

 

Support:51996.65/51750.10/51138.90/51133.20/51000.90/50947.70/50369.40/49974.75/49654.65/49530.45/49057.40/48636.45/48313.60/48292.25/48203.45/48161.75/47435.75/46983.75/46579/46077.85. 

Resistance:52199.45/52340.25/52782.75/52794.95/53357.70/53741.40/54467.35/54593/54604/54772/54815/54924/55097/55209/55444/55646/55827/56135/56218.

OVERALL, VIEW: --

It opened on a negative note and thereafter had both side moves during the day and finally ended the day with a robust gain of 805.40 points. It had volatile session today. The overall chart setup is still weak but got slightly better, it is already into the deep correction mode, but out of corrective mode for the recent rise, today it bounced back above almost all its short & medium term moving averages on the daily chart and above all short & medium term moving averages on the weekly, which is a good sign and if it sustains above it on the closing basis then it could extend the up-move. But despite the robust bounce back today all the important technical indicators are still negative and this is concerning, and indicates that further fall cannot be ruled out in coming days as yet and it may happen with intermittent relief rallies. Therefore it is not yet out of woods. It is in the long term uptrend as of now but the short & medium term bias is bearish as of now.

POSSIBLE MOVE ON THE UPSIDE:-

The good thing is that it still has higher top & bottom on the line chart and it is above its pullback threshold point of 51202.74(figure may change) and bounced back above its correction threshold point of 51726.23(figure may change) for recent rise, which is good sign for the continuation of the up-move. Please note that as long as it sustains above it on the closing basis the chances of up move will be alive and the possible upside target could be 52331----52835---53459----53613---53639.71, but break and sustained close below 51726.23 & 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 52376----52487.43(figure may change) and sustain on the closing basis, and if it moves above the range of 53281----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 strong up momentum track if it moves above 53613 & 53636.71(figure may change) and sustain on the closing basis. 

POSSIBLE MOVE ON THE DOWNSIDE:-

Moving down from here it may find broad support at (for other support points see the table on the upside) 51904----51859-----51756-----51726.23----51613----51411---51202.74-----50841-----50766------50725.76----50692-----50617--------50381-----50205---49883----49794-----49654.65------49639----49273----49201.72-----48997-----48636.45---48292.25---48203.45---47756(figures may change), it can bounce back from any of these points,  break & sustained close below the range of 51904----51859-----51756 may trigger fall again , break and close below 51726.23 will push it into correction mode for its recent rise and break and sustained close below 51202.74 may end the possibility of a sustained up move for the time being. Please note that the range of 50841-----50766-----50692----50381---50205 and then 49883---49794---49654.65---49639--49273(figure will change every day) is a very strong bounce back support range, but break & sustained close below 50841 will threaten the long term uptrend and thereafter break & close below each point will weaken it further, break and sustained close below 48997 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.

TECHNICAL INDICATORS PLACEMENT ON THE DAILY, WEEKLY & MONTHLY CHART:-

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 monthly chart is still present, but  on the daily & weekly chart  it is slightly oversold or may be neutral at this point of time, so the up move can extend a bit , but pullback rallies  are treacherous in nature and may end abruptly because the overall technical indicators are 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 and it appeared on the monthly chart also , so all together these developments are concerning, therefore, all indication together based on the  indicators on the daily, weekly & monthly chart is pointing that it could head down in coming days and may seek much lower levels once the up move fizzles out. So please be alert and cautiously approach the market.

IT IS SELL ON THE RISE MARKET NOW IN GENERAL;-

It is into the deep correction mode therefore it is sell on rise market now in general till it gets out of the correction mode or give visible sign of correction completion, but aggressive traders can try both side trades depending on the price action for intraday gains, but long trade could be a risky affair.  

NOTE: - IT IS INTO DEEP CORRECTION MODE, LONG TRADE CAN BE TRIED IF IT HOLDS 51726.23 LEVELS (FIGURE MAY CHANGE), ELSE AVOID.

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 or neutral condition.

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. It is above its correction threshold point of 51726.23(figure may change) for its recent rise.

7. It is above almost all its short-term moving averages now on the daily chart and the important average range for day is between 51411---51613---51756----51859---51904---52376(figure will change every day), sustained close above this range can help in extending the up move.

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 51726.23----51549.93----51492.11----50725.73----49201.72---45416.49 (figure may change) and if it sustain below these points correction will deepen. 

4 The price action was mixed today.

TRADING CALL: -- 

1. Long trade can be tried on decline near or within the range of 51860-----51790 with a stop loss of 51500 or can buy if it moves above 52200 and maintain for some time with a stop loss of 51980  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 52500---52600 with a stop loss of 52750. 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.