A TECHNICAL UPDATE ON CNX-BANK NIFTY—7.10.2024

 

CNX-BANK NIFTY

Open—51643.75--High—52358.35--Low—51492.35--Close—51462.05 on 4.10.2024.

 

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 with a small down gap and thereafter it had both side moves during the day and in the process it filled today’s gap and finally ended the day with a loss of 383.15 points. It has been falling from the last five days in a row, so it may stage a relief rally anytime but the overall bias is down as of now. 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 3-4 & 1-2 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 deep correction mode now, furthermore it is below all its short term moving averages and below few medium term moving averages on the daily chart and also below few short term moving averages on the weekly chart and all important technical indicators are negative now, so all developments together indicates that further fall looks inevitable in coming days. Please note that it is still above one of its important point of 51189 and if it sustains above it on the closing basis then it can have a possible pullback, but break & sustained close below it can drag it down to 50370 levels, please note that 50370 is a key bottom and good bounce back point, but break and sustained close below this level may accelerate the fall.  It is important to mention here that, if it closes above 52083.59 (figure may change) and sustain then there will be some hope that it can extend the up move,  if it closes above 52487.43 and sustain then it will gain a strong foothold, if it moves above the range of 52560----52573---52738----52921 and then above the range of 53331.55---53339-----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 53636.71(figure may change) and sustain on the closing basis.

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 any time, 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 & weekly chart and price action is weak, so 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 may be with a in between relief rally at times, 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) 51347.25----51337----51263----51189----50947.70------50790----50725.76----50701----50616----50564-----50264-----49730----49654------49201.72-----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 break and close below each point will weaken it further. Please note that the range of 50701----50616----50564-----50264----49730----49654(figure will change every day) is a very strong bounce back support range, but sustained break and close below the range of 50701----50616----50564 will threaten the long term uptrend and break and sustained close below the range of 50264----49730----49654 may accelerate the fall further 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 NOW, THEREFORE FOR SAFE TRADERS IT IS SUGGESTED TO AVOID LONG TRADE TILL IT CLOSES ABOVE 52083.59 (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 50616 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 in oversold zone now, so it may give a relief rally before sliding down further. Please note that indicators, on the weekly & monthly chart, also indicating overbought condition, sell signal and negative divergence too.

3 The price action was weak today.

4. It has broken its recent bottom on the line & bar chart both.

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---51549.93 (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. 

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 53339---52921---52738----52573----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 51000----50950 with a stop loss of 50800 or can buy on decline if it holds 51347 for some time then with a stop loss of 51200 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 52000---52150 with a stop loss of 52360 or can sell if it moves below 51347.25  with a stop loss of 51500 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.