A TECHNICAL UPDATE ON CNX-NIFTY-7.10.2024.

 

CNX-NIFTY

Open-25181.90--High-25485.05—Low---24966.80---Close-25014.60 on 4.10.2024.

Support:24885.15/24854.80/24753.15/24472.80/24141.80/24099.70/24074.20/23893.70/23667.20/23664/23350/23338.20/23110.80/22794.70/22775.70/22526.60.

Resistance:25078.30/25285.55/25333.65/25445.70/25847.35/26277.35/26328/26995/27095/27212/27293/27381.

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 235.50 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 25739.20 & 26151.40 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, 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 on the daily chart, so all developments together indicates that further fall looks inevitable in coming days. Please note that today it closed below its very important point of 25058 and if it sustains below it on the closing basis then it can come down to 24753.15 levels ,please note that 24753.15 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 25276.09 (figure may change) and sustain then there will be some hope that it can extend the up move, if it closes above the range of 25504----25587-----25637----25675-- 25714.81(figure may change)  it will gain a strong foothold, if it moves above the range of 25795----25917.64(figure may change) and sustain 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 26043.29 (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 sell  mode triggered on the daily & weekly chart and price action is also 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 good support at 24804-----24753.15----25521.63-----24456-----24370-----24099.70-----24074.20----24047.39-----23991----23893.70(few figures may change Daily) 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. and most importantly break & sustained close below 24753.15 may accelerate the down move further, break and sustain close below 24370 can drag it down to 23893.and finally break and close below 23991 & 23893.70 will threaten the long term uptrend and may trigger fresh big down move and if sustain below these points on the closing basis then the correction could be more painful price-wise and 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 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 25276.09 (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.   

2. It is far-far above its most critical points of 21821.05---21801.45---21777.65---21776.87---21731.40---21727.75 & 21710.20, which is must to keep the up momentum going in the year 2024. Sustained break below this range may witness accelerated fall.

WEAKNESS: -.

1. All the seven important technical indicators on the daily chart, indicating overbought condition, sell mode and negative divergence, few indicators on the weekly chart also indicates overbought condition and negative divergence and finally monthly chart also indicates overbought condition.    

2. 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.

3. It is into correction mode now as it closed below some of the correction threshold points of 26043.29----25917.64---25714.81----25098.32-----25064.27 (figures may change). The other important correction threshold points are at 24521.63---24047.39----23659.18---21848.52 (figure may change) and if it sustain below these points correction will deepen. 

4. It is below some of its short-term moving averages now on the daily chart and the important average range for today is between 25795---25675----25637----25587----25504----25502 (figure will change every day), sustained close below this range can accelerate the down move.

5. The price action was weak today.

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

TRADING CALL: --

1. Long trade can be tried on decline near or within the range of 24800----24753 with a stop loss of 24680 or can buy on decline if it holds 24967 for some time then with a stop loss of 24875 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 25350--25400 with a stop loss of 25500 or can sell if it moves below 24960 with a stop loss of 25100. 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

Mobile—8240951127/9831313654.

Email--- suranank@gmail.com