A TECHNICAL UPDATE ON CNX-BANK NIFTY—6.11.2024

 

CNX-BANK NIFTY

Open—51052.60--High—52289.55--Low—50865.45--Close—52207.25 on 5.11.2024.

Support:52199.45/51996.65/51750.10/51354.85/51138.90/51133.20/51000.90/50947.70/50369.40/50194.30/49974.75/49654.65/49530.45/49057.40/48636.45/48313.60/48292.25/48203.45/48161.75/47435.75/46983.75/46579/46077.85. 

Resistance:52354.85/52577.50/52782.75/52794.95/53357.70/53741.40/54467.35/54593/54604/54772/54815/54924/55097/55209/55444/55646/55827/56135/56218.

OVERALL, VIEW: --

It opened on a negative note and thereafter had both side moves during the day and finally ended the day with a robust gain of 992 points. The overall chart setup is weak; it is still into the deep correction mode for its earlier rise, but it is out of corrective mode for its recent rise. Amid volatility it is playing a see-saw game with the moving averages as it bounced back again above all its short term & almost all its medium term moving averages on the daily chart, it is  above all its short term moving averages on the weekly chart also, after making lower top & bottom yesterday it crossed its previous top on the line chart today, furthermore few important technical indicators are positive and in the buy mode therefore all developments together indicating that today’s up-move can extend in the coming days,  provided it holds the range of  52015.06---51953---51750---51694---51605----51550.15---51475.35----51202.74 & 51107(figure may change) and particularly above 51202.74 & 51083 on the closing basis ,else it may start to drift down again. Similarly it will pick up speed once it moves above 52355 & 52578 and sustain on the closing basis. 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---51107(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 UPSIDE:-

Please note that if it holds the range of 52015.06---51953---51750---51694---51605----51550.15---51475.35----51202.74 & 51107(figure may change) particularly above 51202.74 & 51107 on the closing basis then the broad upside target could be 52355----52577---52835----53459----53613, it can correct at any of these points and may resume the up-move again or the on-going rally may fizzle out also and sustained break & close below 51202.74 & 51083 may end the possibility of an up-move for a while and it may head down. Please note that to gain a strong foothold it has to move above 52355---52487.43----52577.50 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 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.

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) 52015.06---51953---51750---51694---51605----51550.15---51475.35----51202.74----51107-----50845----50783-----50725.76----50617------50524-----50457---50194----50120----49874-----49806----49654.65------49620-----49526-----49491----49201.72-----49215-----48636.45---48292.25---48203.45---47756(figures may change), it can bounce back from any of these points, but break & sustained close below each point will weaken it ,break & sustained close below 51202.74 & 51107 may end the possibility of a continued up –move for the time being. Please note that  the range of 51083----50845----50783-----50725----50617---50524-----50457----50194---50120 and then 49874----49806-----49654.65----49620---49526----49491----49215(figure will change every day) is a very strong bounce back support range,  break & sustained close below 51107 will threaten the long term uptrend and thereafter break & close below each point will weaken it further, break and sustained close below 49215 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 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 again the overbought  condition is there on the daily, weekly and monthly chart, 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 1-2 trading sessions 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 once this on-going up move is over. 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 51107 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. Four out of seven important indicators is positive on the daily chart, indicating overbought condition, but in buy signal also.

5. It is out of the correction mode for its recent rise as it closed above its threshold point of 52015.06(figure may change).

6. It has made higher top on the line chart today.

7 It is above all its short-term moving averages now on the daily chart and the important average range for day is between 51567---51605---51659----51694--51750----51953(figure will change every day), sustained close above this range will help to extend 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. Three out of 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--- (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.

4 The price action was mixed today.

TRADING CALL: -- 

1. Long trade can be tried on decline near or within the range of 51850----51765 with a stop loss of 51450 or if it moves above 52355 and maintain for some time with a stop loss of 52100 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 52800---52900 with a stop loss of 53150. 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.