A TECHNICAL UPDATE ON CNX-BANK NIFTY—9.10.2024

 

CNX-BANK NIFTY

Open—50736.10--High—51176.05--Low—50466--Close—51021 on 8.10.2024.

 

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

OVERALL, VIEW: --

It opened on a positive note and thereafter it had both side moves during the day and finally after 6 days of fall in a row as anticipated it staged a relief rally and ended the day with a gain of 542.10 points. The stipulated time for filling the  gap it created on 30.9.2024(gap figure is 53763.20) is over therefore chances of filling the has receded for the time being but it will fill the gap one day for sure, but the gap of  3.10.2024 is still there and if it makes an effort to fill the gap in 1-2 trading sessions, which is technically possible then it could come up to 52817.80  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 weakened, it is into the deep correction mode now and today’s rally seems to be a very normal relief rally as of now and if it closes below 50944.36(figure may change) then this rally may fizzle out, else it can extend a bit. Please note that it is below all its short term moving averages and below few medium term moving averages on the daily chart and below all short term moving averages on the weekly chart also and 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. Please note that moving down from here it has the strong support points of 50944.36----50725.76 & 50617(figure may change) it can bounce back from these points, but break and sustained close below these points can drag it down to 50370 &49654.65 levels, please note that both point is a key bottom and good bounce back point too, but break and sustained close below the these points may accelerate the fall.  It is important to mention here that, if it closes above 51202.74 (figure may change) and sustain then there will be some hope that it can extend the up move,  if it closes above 52487.43----52551-----52577----52699 and sustain then it will gain a strong foothold, if it moves above the range of 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 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, it did give a pullback today but has to be seen how long it can last because 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 and price action is also weak, 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 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 relief rally as it happened today. It is in the long term uptrend 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) 50944.36----50725.76----50687-----50656------50617----50570----50266-----50022---49717----49654.65------49632----49491----49201.72-----49111----48852-----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. Please note that break & sustained close below 50944.36 & 50725.76 points may trigger fresh fall. Please note that now the range of 50687-----50656-----50570----50266---50022 and then 49717---49654.65---49491--49111--(figure will change every day) is a very strong bounce back support range, but break & sustained close below 50656 will threaten the long term uptrend and thereafter break & close below each point will weaken it further, break and sustained close below 48852 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 NOW , THEREFORE FOR SAFE TRADERS IT IS SUGGESTED TO AVOID LONG TRADE TILL IT CLOSES ABOVE 51202.74 (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. Break below 50656 will threaten the long term uptrend,which please note.

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 condition.

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

4. 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 50944.36---50725.73----49201.72---45416.49 (figure may change) and if it sustain below these points correction will deepen. 

5. It is below some of its short-term moving averages now on the daily chart and the important average range for today is between 52699---52577---52551----52245---52090---52040(figure will change every day), sustained close below this range can accelerate the down move.

6 The price action was mixed today.

TRADING CALL: -- 

1. Long trade can be tried on decline near or within the range of 50725----50617 with a stop loss of 50400 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 51450---51550 with a stop loss of 51650 or can sell if it moves below 50450  with a stop loss of 50650 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.