A TECHNICAL UPDATE ON CNX-BANK NIFTY—1.11.2024

 

CNX-BANK NIFTY

Open—51649.45--High—52005.60--Low—51318.10--Close—51475.35 on 31.10.2024. 

Support:51138.90/51133.20/51000.90/50947.70/50369.40/50194.30/49974.75/49654.65/49530.45/49057.40/48636.45/48313.60/48292.25/48203.45/48161.75/47435.75/46983.75/46579/46077.85. 

Resistance:51354.85/51750.10/51996.65/52199.45/52340.25/52577.50/52782.75/52794.95/53357.70/53741.40/54467.35/54593/54604/54772/54815/54924/55097/55209/55444/55646/55827/56135/56218.

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 332.15 points. The overall chart setup is still weak, it is still  into the deep correction mode for its earlier rise and also into corrective mode  for its recent rise as it is below its threshold point of 52015.06(figure may change), amid volatility it has fallen below  almost all short term moving averages on the daily & weekly chart and almost below all medium term moving averages on the daily chart, it has fallen below its recent down trend line also which is placed at 51550—60(figure will change on the downside daily) today, all development together is a weak sign and if it remains below the averages it can drag it down. But the positive point is that it has made higher top, furthermore few important technical indicators have turned positive and triggered buy signal also, therefore all together it is painting a mixed picture and if it holds 51202.74 & 51044(figure may change)then the chances of up-move will be alive, else it may continue the downslide . The short & medium term bias is down, but the long term uptrend is still intact.

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) 51460----51202.74------51044----50898-----50803-----50792----50725.76----50698-----50617------50495-----50399---50064----49817-----49732----49730----49654.65------49511-----49441----49201.72-----49164-----48636.45---48292.25---48203.45---47756(figures may change), it can bounce back from any of these points, break & sustained close below 51202.74 & 51044 may end the possibility of a continued up –move for the time being. But  please note that  the range of 51044----50898----50803-----50698----50617---50495-----50399 and then 50064----49817----49732---49730-----49654.65----49511---49441----49164(figure will change every day) is a very strong bounce back support range,  break & sustained close below 51044 will threaten the long term uptrend and thereafter break & close below each point will weaken it further, break and sustained close below 49164 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.

 POSSIBLE MOVE ON THE UPSIDE:-

 Please note that if It holds 51202.74 & 51044 (figure may change) on the closing basis then the chances of the up move will be alive but break & sustained close below it may end the possibility of an up-move for a while. Please note that if it sustains above 51202.74 on the closing basis then the broad upside target could be 51480----51739-----51827---52059-----52138---52331----52577----52835----53459---53613 it can correct at any of these points and then may resume the up-move again or up-move can fizzle out for good also. Please note that to gain a strong foothold again it has to move above the range of 51544----51595----51687---51786---51848---52015.06---52277---52355---52487.43(figure may change)  and sustain on the closing basis, for strong strength for the continuation of the up-move it has to move above the range of 53331.55-----53357.70----53500.30----53535(figure may change) and sustain on the closing basis 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 and then it could retest its all-time high of 54467.35 or can go beyond it also.

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, now the overbought condition on the daily, weekly & monthly chart is present, some indicators triggered buy signal also  but the few technical indicators are still weak and most importantly  huge negative divergence  is there on the daily,  weekly and monthly chart , so all together these developments are painting a mix picture now , so watch out for the next 1-2 days t how it pans out eventually and in fact the undertone is weak  , 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 with intermittent relief rallies after this on-going rally finally ends and the break and sustain  close below 51202.74 &51044(figure may change) will possibly end the rally.

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; break below 51044 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.

3. It is above its weak & strong pullback threshold point of 50900.11 & 51202.74(figure may change) respectively, price above these points may help it extend the up-move.

4. Three out of seven important indicators is positive on the daily chart, indicating overbought condition and triggered buy signal also.

5. It l has made higher top on the line chart.

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. Four out seven important indicators on the daily chart are negative , given negative divergence, but in the overbought zone. Please note that indicators, on the weekly & monthly chart, also indicating overbought condition, sell signal and negative divergence too.

3. It is into deep correction mode as it is  below some of the correction threshold points of 53636.71-----53500.30---53331.55--52487.43---52098.30----52015.06 (figures may change). The other important correction threshold points are at ----51549.93----51492.11 ----50725.73----49201.72---45416.49 (figure may change) and if it sustain below these points correction will deepen.

4. It slipped into correction mode for its recent rise as it closed above its threshold point of 52015.06(figure may change).

5 The price action was weak today.

6 It is below almost all its short-term moving averages now on the daily chart and the important average range for day is between 51460---51544---51555----51573---51595---51687(figure will change every day), sustained close below this range can push it down lower.

TRADING CALL: -- 

1. Long trade can be tried on decline near or within the range of 51200----51070 with a stop loss of 50900 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 51850---51950 with a stop loss of 52100 or can sell below 51000 with a stop loss of 51340. 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.