A TECHNICAL UPDATE ON CNX-BANK NIFTY—5.11.2024

 

CNX-BANK NIFTY

Open—51764.50--High—51764.50--Low—51066.80--Close—51215.25 on 4.11.2024. 

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 positive note and the open was the high also for the day and thereafter it steadily moved down and finally ended the day with a loss of 458.65 points. The overall chart setup is  weak; it is still into the deep correction mode for its earlier rise and also into corrective mode for its recent rise. Amid volatility it fell again below all its short term & almost below all its medium term moving averages on the daily chart, it fell below almost all its short term moving averages on the weekly chart also, it has made lower top & bottom on the line chart today, therefore all developments together pointing that it could head down further in coming days. But still the good point is that a few important technical indicators are positive and in buy mode, furthermore it is still holding on to its key points of 51202.74 & 51083(figure may change) and if it manages to hold these points on the closing basis then the chances of up-move will be alive, else it may drift down further. The short & medium term bias is down, but the long term uptrend is still intact.

It is important to mention here that to keep the up momentum going in the month of November-2024, it has to maintain above 51550.15---51475.35----51202.74---51083(some figure may change daily) and sustain on the closing basis, then the up-move can extend, else it may lose the steam and start moving down.

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) 51202.74------51083-----50823----50757-----50725.76----50617------50519-----50440---50194----50098----49854-----49781----49654.65------49620-----49478----49201.72-----49201-----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 & 51083 may end the possibility of a continued up –move for the time being. But  please note that  the range of 51083----50823----50757-----50725----50617---50519-----50440----50194 and then 50098----49854----49781-----49654.65----49620---49462----49201(figure will change every day) is a very strong bounce back support range,  break & sustained close below 51083 will threaten the long term uptrend and thereafter break & close below each point will weaken it further, break and sustained close below 49201 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 to keep the possibility of up momentum intact It has to move above the range 51550.15----51475.15---51202.74 & 51064 (figure may change) on the closing basis, fortunately it is still above the last two points of 51202.74 & 51064 and as long as it holds these points on the closing basis 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 and it may head down further. Please note that to gain a strong foothold again it has to move above the range of 51540---51641---51701-----51879----52015.06---52247---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----53578(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 oversold/ neutral condition on the daily& weekly chart but overbought condition persist on the monthly, some indicators triggered buy signal also  but  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 mixed picture now , so watch out for the next 2-3 days how it pans out eventually. But 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. Please note that break and sustained close below 51202.74 &51083(figure may change) will possibly end the rally, else chances of up-move will be alive.

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 51083 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. Two out of seven important indicators is positive on the daily chart, indicating overbought condition, but in buy signal.

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. Five out seven important indicators on the daily chart are negative , given negative divergence, in the overbought/neutral zone, but buy signal is on. 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----51549.93----51492.11 ---- (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.

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 l has made lower top & bottom again on the line chart.

7 It is below all its short-term moving averages now on the daily chart and the important average range for day is between 51457---51516---51540----51641---51701----51857(figure will change every day), sustained close below this range can witness an accelerated fall.

TRADING CALL: -- 

1. Long trade can be tried if it holds the range of 51202----51070 for some time with a stop loss of 50850 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 51550---51650 with a stop loss of 51750 or can sell below 51000 with a stop loss of 51250. 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.