A TECHNICAL UPDATE ON CNX-BANK NIFTY—26.11.2024

 

CNX-BANK NIFTY

Open—52046.35--High—52331.10--Low—51774.05--Close—52207.50 on 25.11.2024. 

Support:51996.65/51750.10/51138.90/51133.20/51000.90/50947.70/50865.45/50438.30/50382.10/50369.40/50194.30/49974.75/49904.40/49688.80/49654.65/49057.40/48636.45/48292.25/48203.45/48161.75/47363.40/46983.75/46077.85/45828.80/45661.75/44633.85/44429/43600.25/43345.45/43230.95/42582.20/42105.40. 

Resistance:52354.85/52493.95/52577.50/52782.75/52794.95/53180.75/53357.70/53792.85/54247.70/54467.35.

OVERALL, VIEW: --

It opened with a huge up-gap and thereafter had both side moves during the day and finally ended, the day with a handsome gain of 1072.10 points. The gap it created today is still there and if it makes an effort to fill the gap in next 4-5 trading sessions which is technically possible then it can come down to 51271 levels, but if it fails to fill the gap in the stipulated time then the chances of filling the gap will recede for the time being, but it will surely fill the gap someday, which may please be noted. It had a strong up-move today and long term threat has ended as it closed above its threshold point of 51291(figure will change daily) which is hugely positive. Please note that if it holds the range of 51877----51556---51405(figure will change daily) and then 51291 & 50891.64 levels on the closing basis then the up-move is likely to continue and the broad upside target could be 52355---52494----52578---52680----53363---53532, please note that it may correct at any of these point and then may resume the up-move again. But break & sustained close below 51291 & 50891.64 (figure may change) may derail the on-going up move.  

The overall chart setup is still weak, but it showed some sign of improvement, it is still into the deep correction mode, but today it bounced back above all its short, medium and long term moving averages on the daily, weekly & monthly chart which is a hugely positive sign for the continuation of the up-move and if it sustain above it the up-move is surely going to extend. Furthermore all the important technical indicators have turned positive today on the daily chart and indicate that it is in the buy mode with positive divergence. The only concerning thing is that it is inching towards overbought zone. Therefore all together indicators are giving positive signal, therefore it is likely to move ahead further in coming days provided it holds the key points as mentioned above. The short & medium term trend is bearish and the long term uptrend is intact now.

POSSIBLE MOVE ON THE UPSIDE:-

Please note that if it holds the range of 51877----51556---51405(figure will change daily) and then 51291 & 50891.44 the up-move is likely to extend, but break and sustained close below 51291-&  50891.44 may derail the  on-going  up-move. Please note that  to give thrust to the up-move it has to move above 52355---52494----52578 and sustain on the closing basis and for the strong strength for the continuation of the up-move it has to move above the range of 53331.55-----53357.70----53500.30(figure may change) and sustain on the closing basis and it will get into the strong up momentum track if it moves above 53531.30 & 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.

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) 51610---51556----51405----51291---50956----50891.64----50632----50617-----50577-----50282----50199-----50261----50172-----49934----49847-----49654.65----49622----49520-----49201.72-----48636.45---48292.25---48203.45---47756(figures may change), it can bounce back from any of these points, please note that break & sustained close below the range of 51610---51556----51405 will be an alert sign, break & sustained close below 51291 will threaten the long term uptrend, break & sustained close below 50891.64 may end the possibility of the up move for a while, break & sustained close below 50577 may trigger fresh fall and thereafter break & close below each point will weaken it further, but the range of 49956----49549 is the last very strong bounce back support range, if it break & sustain below this range on the closing basis, then it may have an accelerated fall. Please note that sustained close below 49549 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.

TECHNICAL INDICATORS PLACEMENT ON THE WEEKLY & MONTHLY CHART:-

On the weekly chart almost all indicators are negative ,sell mode is on , there is huge negative divergence but the only comforting thing is that it is in oversold zone, so today’s up-move can extend a bit, so watch out. On the monthly chart it is in overbought zone and with huge negative divergence and poised to give sell signal may be this month end. Therefore all together indicators on the weekly & monthly chart as of now indicates that it is not yet out of woods and further fall is very much on the horizon in coming weeks and months. So keep a watch on the price action for further directional indication. The undertone is bearish as of now. 

BUY ON DECLINE TILL IT HOLDS PULLBACK THRESHOLD POINT & LONG TERM AVERAGE;-

It is into the deep correction mode but above its pullback threshold point of 50891 and long term moving average of 51291 therefore buy on decline is suggested at appropriate support points till it holds the above points. But sell trade can also be tried after reasonable rise in the appropriate range for intraday corrective gains. So both side trades can be tried depending on the price action for intraday gains.  

STRENGTH: -

1. It is still in 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. Two out of seven important indicators is positive on the daily chart, indicating oversold condition, in sell mode but not yet broken bottom on the indicator, which is slight positive for it.

4 It is well above its strong pullback threshold point of 50891.64(figure may change), sustained close above this point will help in extending the up-move.

5. It has made higher top & bottom on the line chart again and higher top on the bar chart..

6 The price action was positive today.

7. All the seven important technical indicators are positive on the daily chart with buy signal, positive divergence but inching towards overbought zone.

8 It is above all its short-term moving averages now on the daily & weekly chart and the important average range for day is between 51610----51556-----51405----51327----51244----51184(figure will change every day), sustained close above this range can help it extend the up-move.

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. Please note that indicators, on the weekly chart is oversold (so it may rally a bit), but in sell mode and with huge negative divergence & monthly chart, 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--- (figures may change). The other important correction threshold points are at 52098.30----52015.06---- 51549.93---- 51492.11 ---- 50725.73---- 49201.72---45416.49 (figure may change) and if it sustain below these points correction will deepen.

TRADING CALL: -- 

1. Long trade can be tried on decline near or within the range of 52068------52000 with a stop loss of 51750 or can try long trade if it moves above 52355 and maintain for some time with a stop loss of 52030 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 52700---52800 with a stop loss of 52925 or can sell if it moves below 51770 and maintain for some time with a stop loss of 52070. 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.