A TECHNICAL UPDATE ON CNX-BANK NIFTY—4.10.2024

 

CNX-BANK NIFTY

Open—52314.45--High—52582.95--Low—51683.40--Close—51845.20 on 3.10.2024.

 

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 with a big down gap and thereafter had restricted up move and then steadily went down and finally ended the day with a colossal loss of 1077.40 points.  The gap it created on 3.10.2024 and on 30.9.2024 is still there and if it makes an effort to fill the respective gaps in 4-5 & 2-3 trading sessions, which is technically possible then it could come up to 52817.80 & 53763.20 levels but if it fails to fill the gap in the stipulated time then chances of filling the gap will recede for the time being, but it will surely fill the gap one day, which may please be noted. The chart setup has terribly weakened, it is into the correction mode as it is below its correction threshold points and some other key points of 53636.71-----53500.30----53496----53357.70---53331.55—53291----53026----52690-----52560------52487.43----52098.30 (figures may change) which is a weak sign. Furthermore it also below all its short term moving averages and below few medium term moving averages also and all important technical indicators are negative now, so all developments together indicates that further fall may be ahead, therefore if it does not bounce back above the aforesaid range or above some of the critical points and sustain on the closing basis in the shortest possible time, then it may witness an accelerated fall from here. It is important to mention here that if it closes above 52340.41 (figure may change) and sustain then there will be some hope that it can extend the up move, if it closes above 52487.43 it will gain a strong foothold, if it moves above the range of 53026----53331.55---53357.70----53496(figure may change) and sustain it may gain good strength for the up move but it will get into the good up momentum track only once it closes above 53636.71(figure may change) and sustain.

It is important to mention here that it is having 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 short rally, most importantly  huge negative divergence  is there on the daily& weekly chart and it appeared on the monthly chart too and sell  mode triggered on the daily chart all 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  and the process is on and it may slide further, so keep an  eye on for the positive  price action for the possible up rally. It is in the long term uptrend as of now, but the short term bias is bearish..

Moving down from here it may find broad support at (for other support points see the table on the upside) 51778----51652-----51549.93----51493----51337----51263----51189----50790----50725.76----50688----50587----50550-----50247-----49769----49654------49201.72-----48636.45---48292.25---48203.45---47795.89----47533.83(figures may change), it can bounce back from any of these points, It slipped into the correction mode today as it closed below its correction threshold points and  other key points of 53636.71-----53500.30----53496----53357.70---53331.55—53291----53026----52690-----52560------52487.43----52098.30 figures may change) which is a  very weak sign and if sustain below this range it may witness an accelerated fall and thereafter close below each point will weaken it further. Please note that the range of 50688----50587----50550-----50247----49769----49654(figure will change every day) is a very strong bounce back support range, but sustained break and close below the range of 50688----50587----50550 will threaten the long term uptrend and break and sustained close below the range of 50247----49769----49654 may accelerate the fall further.

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

NOTE: - IT IS INTO DEEP CORRECTION MODE NOW, THEREFORE FOR SAFE TRADERS IT IS SUGGESTED TO AVOID LONG TRADE TILL IT CLOSES ABOVE 52340.41 (FIGURE MAY CHANGE) AND SUSTAIN, HOWEVER AGGRESSIVE TRADERS CAN TRY LONG TRADE NEAR CRITICAL SUPPORT POINTS WITH STRICT STOP LOSS FOR PULLBACK GAINS . IT IS IN THE LONG TERM UPTREND NOW, BUT SHORT TERM BIAS IS BEARISH.

STRENGTH: -

1. It is in the long-term uptrend now, but break below 50587 will threaten 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 slightly oversold ,so it may give a relief rally before sliding down further. Indicators(few) on the weekly & monthly chart, indicating overbought condition and sell signal and negative divergence.

3 The price action was weak today.

4. It has already broken its recent bottom of 53968.60 on the line chart.

5. 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----50725.73----49201.72---45416.49 (figure may change) and if it sustain below these points correction will deepen. 

6. It is below some of its short-term moving averages now on the daily chart and the important average range for today is between 53496---53291---53026----53021----52690----52560(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 51250----51000 with a stop loss of 50850 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 52350---52450 with a stop loss of 52600 or can sell if it moves below 51620 with a stop loss of 51850 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.