A TECHNICAL UPDATE ON CNX-NIFTY-1.11.2024

 

CNX-NIFTY

Open-24349.85--High-24372.45—Low---24172.60--Close-24205.35 on 31.10.2024.

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

Resistance:24472.80/24498.20/24567.65/24694.35/24753.15/24854.80/24885.15/24978.30/25078.30/25285.55/25333.65/25445.70/25847.35/26277.35/26328/26995/27095/27212/27293/27381.

OVERALL, VIEW: --   

It opened on a flat to positive note and thereafter had both side moves during the day and finally ended the day with a loss of 135.50 points. The overall chart setup is still weak, it is already into the deep correction mode and also into correction mode for its recent rise,  it is still below all its short & medium term moving averages on the daily chart and below all short term moving averages on the weekly chart and most important it is below one of its long term moving average today, it is making lower top & bottom on the line & bar chart and almost all the important technical indicators are negative now, therefore all developments together indicates that further fall looks inevitable in coming days with in between relief rallies. It is important to mention here that the range of 24200---24000 is a very strong bounce back range but the hope of up move will be there only if it moves above 24267(figure will change daily) and sustain on the closing basis and break & sustained close below the above range may witness an accelerated down move. The short & medium term trend is bearish, but the long term uptrend is still intact.

HEAD & SHOULDER PATTERN VISIBLE ON THE DAILY CHART:-

It has decisively broken the neckline today which is placed at 24753.15 and if it sustains below it then the maximum downside could be in the range of 23200---23100. Please note that if it bounce back above 24753.15 and sustain then this pattern will be negated. This is a very powerful pattern and rarely fails.

POSSIBLE MOVE ON THE DOWNSIDE:-

Moving down from here it may find good support at 24148-----24099.70-----24074.20----24047.39-----24033-----23893.70-----23602-----23549-----23489----23435----23380----23317(few figures may change daily) it can bounce back from any of these points, please note that if it sustains below 24370 & 24347.70 on the closing basis then it may end the possibility of an up-move and can drag it down to 23893.70 levels. Please note that it has threatened the long term uptrend today as it closed below its key point of 24267, break & sustained close below 23893.70 may trigger fresh big down move and if sustain below this point on the closing basis then the correction could be more painful price-wise and time-wise both and finally break & sustained close below 23317 may potentially end the long term uptrend for the time being.

POSSIBLE MOVE ON THE UPSIDE:-

Please note that it is below its crucial key points of 25106.68---24753.15----24593.91---24347.70----24267(figure may change), if it moves above  24267(figure will change daily, it is for the day) and sustain on the closing basis then there is  hope that it can move up, if it moves above 24347.70(weak pullback threshold point) and sustains  on the closing basis then it can have a feeble up-move,  if it moves above 24593.91(strong pullback threshold point, figure may change) and sustain on the closing basis then there is a strong possibility that the up move can extend for sure, if it moves above 24753.15 and sustain on the closing basis then it will give strong chance for extending the up-move and may resume the big up-move too, and if it moves above  25106.68(correction threshold point for its recent rise, figure may change) and sustain on the closing basis then it will come out of corrective mode for its recent rise and it may provide firmness for the continuation of the up-move. But to gain a strong foothold for the continuation of the up move it has to move above the range of 24362---24448----24461----24560---24689---24708(figure may change) and sustain on the closing basis, and if it moves above 25714.81 & 25917.64(figure may change) and sustain on the closing basis then it may gain good strength 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.

TECHNICAL INDICATORS PLACEMENT ON THE DAILY, WEEKLY & MONTHLY CHART:-

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  monthly chart is still present, but  on the daily & weekly chart  it is in the oversold or neutral zone now,  so it may stage a short rally anytime and it rallied but it could not last because the overall technical setup is very weak and most importantly  huge negative divergence  is there on the daily, weekly & monthly chart  and sell  mode is also there on the daily & weekly chart, so all together these developments are concerning, therefore, all indication together based on the indicators on the daily, weekly & monthly chart is pointing that it  may slide further in coming days may be with an in between short relief rally at times and the down move is on.

IT IS SELL ON THE RISE MARKET NOW IN GENERAL;-

It is into the 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; but the trend is threatened as it closed below a key point of 24258(figure will change daily.

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.

3. One out of seven important indicators is positive on the daily chart, indicating oversold /neutral condition.

WEAKNESS: -.

1. Six out of seven important technical indicators on the daily chart are negative, indicating oversold condition, sell mode and negative divergence, all indicators on the weekly chart  are also negative indicates overbought condition, sell mode and negative divergence and finally on the monthly chart also it indicates overbought condition and negative divergence also appeared.    

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----25106.68----25098.32-----25064.27-----24521.63--- (figures may change). The other important correction threshold points are at 24047.39----23659.18---21848.52 (figure may change) and if it sustain below these points correction will deepen. 

4. It is below almost all its short-term moving averages now on the daily chart and the important average range for the day is between 24362---24448----24461----24560----24689---24708 (figure will change every day), sustained close below this range can accelerate the down move.

5. It is below its strong pullback threshold point of 24593.91(figure may change) and also below weak pullback threshold point of 24347.70(figure may change).

6. It is making lower top & bottom on the line and bar chart both.

7. The price action was weak today.

TRADING CALL: --

1. Long trade can be tried on decline within the range of 24180---24100 with a stop loss of 23980 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 24350—24380 with a stop loss of 24450 or can sell if it moves below 24170 and maintain for some time with a stop loss of  24280 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