A TECHNICAL UPDATE ON CNX-BANK NIFTY—28.10.2024

 

CNX-BANK NIFTY

Open—51369.75--High—51501.05--Low—50382.10--Close—50787.45 on 25.10.2024.

 

Support:50369.40/50194.30/49974.75/49654.65/49530.45/49057.40/48636.45/48313.60/48292.25/48203.45/48161.75/47435.75/46983.75/46579/46077.85. 

Resistance:50947.70/51000.90/51133.20/51138.90/51750.10/51996.65/52199.45/52340.25/52577.50/52782.75/52794.95/53357.70/53741.40/54467.35/54593/54604/54772/54815/54924/55097/55209/55444/55646/55827/56135/56218.

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 743.70 points. The overall chart setup is terribly weak, it is already into the deep correction mode for earlier rise, it is also into correction mode for its recent rise also, it is below all its short & medium term moving averages on the daily chart and  below all short term moving averages on the weekly chart and broken few long term moving averages on the daily chart which is placed at 50953(figure will change every day) for the day  and making lower top & bottom on the line & bar chart, therefore all together it is  giving very weak signal and if it sustains below the averages on the closing basis then further fall looks certain. Furthermore all the important technical indicators are still negative on the daily chart and this is concerning, and indicates that further fall cannot be ruled out in coming days with intermittent relief rallies and it has triggered the downslide toady. The short & medium term trend was already bearish and today it has threatened the long term uptrend also, therefore it is suggested to approach market very cautiously.

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) 50773-----50743-----50725.76----50627-----50617------50439-----50310---49983----49737-----49663----49654.65------49404-----49397-----49364----49201.72-----49082-----48636.45---48292.25---48203.45---47756(figures may change), it can bounce back from any of these points, the long term uptrend is threatened today as it is below its threshold point of 50953, so it is on a very weak technical footing now. But  please note that still the range of 50773-----50743----50617---50439-----50310(it bounced back from this range today, figures will change every day) and then 49983---49737---49663----49654.65---49404-----49364----49082(figure will change every day) is a very strong bounce back support range,  and thereafter break & close below each point will weaken it further, break and sustained close below 49082 may potentially end the long term uptrend for the time being 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, which may please be noted. The ultimate strong bounce back support range is between 49654.65---49404-----49364----49082.

POSSIBLE MOVE ON THE UPSIDE:-

Please note that it is below its key points of 50900.11----50953-----51202.74 (figure may change), if it moves above 50900.11(weak pullback threshold point) and sustain on the closing basis, then it may have a feeble up move, if it moves above 50953(long term moving average) and sustain on the closing basis then it can move up further and if it moves above 51202.74(strong pullback threshold point) and sustains on the closing basis then the up-move is likely to extend further for sure. Please note that to gain a strong foothold it has to move above 51488----51569----51672----51697----52015.06---52487.43(figure may change) and sustain on the closing basis, and if it moves above the range of 53331.55-----53357.70----53433----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.

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 oversold or may be neutral at this point of time,  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 is also there on the daily & weekly chart as of now and it appeared on the monthly chart also , so all together these developments are very concerning, therefore, all indication together based on the  indicators on the daily, weekly & monthly chart is pointing that it could head down  and may seek much lower levels in coming days. So please be alert and cautiously approach the market now.

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.  

STRENGTH: -

1. It is still 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.

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. All the seven important indicators on the daily chart are negative and in sell mode, given negative divergence, but in the oversold zone now, so it may give a relief rally from time to time . 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----52015.06----51549.93----51492.11 (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 its correction threshold point of 52015.06(figure may change) for its recent rise.

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

6. It is below all its short-term moving averages now on the daily chart and the important average range for day is between 51433---51451---51488----51569---51672---51697(figure will change every day), sustained close below this range can accelerate the down move.

7. It is below its weak & strong pullback threshold point of 50900.11 & 51202.74(figure may change), price below these points may end the possibility of a sustained pullback.

8 The price action was weak today.

9. The long term uptrend it threatened today as it closed below its benchmark point of 50953(figure will change every day).

TRADING CALL: -- 

1. Long trade can be tried on decline near or within the range of  -50450----50370 if it sustain this level for some time with a stop loss of 50100 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 51300---51400 with a stop loss of 51550 or can sell if it moves below 50369 with a stop loss of 50550  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.