A TECHNICAL UPDATE ON CNX-NIFTY-18.11.2024

 

CNX-NIFTY

Open—23542.15—High—23675.90---Low---23486.10---Close----23532.70 on 14.11.2024.

Support:23484.15/23350/23338.70/23110.80/22794.70/22775.70/22525.65/22303.80/21875.25/21860.25/21821.05/21777.65/21710.20/21530.20/21281.45/21137.20/20976.80.

Resistance:23664/23667.20/23816.15/23893.70/24073.90/24094.20/24099.70/24141.80/24472.80/24498.20/24537.60/24694.35/24753.15/24854.80/25078.30/25234.05/25285.55/25333.65/25445.70/25871.35/26277.35/26328/26995/27095/27212/27293/27381.

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 26.35 points. It is below its crucial point of 23893.70 and almost below all other critical points too and if it sustains below it then fall may accelerate but now it is near its last strong support point of 23431(figure will change every day) which is supposed to be a strong bounce back point, furthermore it has been falling for the last 6 days and it is in the oversold zone ,therefore despite weakness in the chart setup it is likely to stage a bounce back from here in a day or two, but if it breaks this point and sustain then it may have free fall. Therefore it is suggested that long trade can only be tried if it moves above 23893.70 and sustain on the closing basis or near 23431 with strict stop losses, else avoid because it is sell on the rise market in general. The benchmark point is 23893.70 therefore avoid long trade below it and similarly avoid short trade above it.

The overall chart setup is weak; it is already into the deep correction mode. It is below all its short & medium term moving averages on the daily chart, also below all short & few medium term moving averages on the weekly chart & below some short term moving average on the monthly chart and most importantly it is also below almost all long terms moving average on the daily chart, therefore threatened the long term uptrend, which is very concerning. It has broken recent bottom on the line chart, furthermore few important technical indicators turned negative and triggered sell signal, but there is a very strong positive divergence on the daily chart which indicates that it could move up if price action supports and provided it moves above the range of 23893.70---24162.79---24205.35---24302.70----24330 (some figure may change daily) in a shortest possible time and sustain on the closing basis, else slide may deepen. The short & medium term trend is bearish and it has threatened the long term uptrend again today and the threat will only dissipate once it moves above 23556----23673----24089---24204----24302.75 & 24330(figure will change daily) and sustain on the closing basis.

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 and it may resume the strong uptrend. This is a very powerful pattern and rarely fails.

POSSIBLE MOVE ON THE DOWNSIDE:-

Moving down from here it may find good support at 23437----23431----23350—23338.70---23110.80---22794.70(few figures may change daily). Please note that it is below its key & crucial support point of 23893.70 and if it sustain below it on the closing basis then the correction could be more painful price-wise and time-wise both. But moving down further it has only one last critical & strong support point at 23431, which is a strong bounce back point therefore it is likely to stage a mild recovery from here, but the undertone is very weak and if it break and sustained below this point on the closing basis then it will potentially end the long term uptrend for the time being and may seek much lower levels in coming days.

POSSIBLE MOVE ON THE UPSIDE:-

Please note that to give a ray of hope to regain up movement again it has to move above the range of its critical   points of 23734.25---23893.70----24144.84----24330(figure may change) and sustain on the closing basis, if it moves above 23734.25(weak pullback threshold point) and sustain on the closing basis then it may have a feeble up-move, the decider point is 23893.70 if it moves and sustain above it on the closing basis then it could somewhat ensure that the up-move can extend further, if it moves above 24144.84(strong pullback threshold point) and sustain on the closing basis then it may  make sure that the up-move can extend further for sure, if it moves above 24330 and sustain on the closing basis, then it will end the long term uptrend threat and if it moves above 24753.15 and sustain on the closing basis then it is likely that it will strongly extend the up-move and may resume the big up-move too. But to gain a strong foothold for the continuation of the up move it has to move above the range of 24538---24753---24833---25082(figure may change) and sustain on the closing basis, and if it moves above 25377----25663----25714.81 & 25917.64(figure may change) and sustain on the closing basis then it may gain extraordinary 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 in the neutral zone now, it is in sell signal on the daily chart  but huge positive divergence is there on the daily chart, which indicates that it can possibly take it up to 24800+ level as of now, if price action supports but price action is terribly weak, therefore it has to be seen how it pans out in the next few trading sessions  because the overall technical setup is still very weak on the daily, weekly & monthly chart and most importantly  huge negative divergence  is there on the  weekly & monthly chart  and sell  mode is also there on the weekly chart, so all together these developments are painting a mix picture now, so keep a watch on the price action for further directional indication. As of now as expected down move is on and the undertone is hugely bearish.

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 uptrend is threatened.

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 technical indicators are positive indicates oversold condition and positive divergence, which can pull the index up from here, so watch-out.

4. It has crossed its previous top on the line & bar chart both.

WEAKNESS: -.

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

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 deep 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--- 24367.34--24047.39----23659.18--- (figures may change). The other important correction threshold points are at 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 23930----23981----24046----24098----24195---24247---24330---24475----24753---24833 (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 24144.84(figure may change).

6. The price action was weak today.

7. It threatened the long term uptrend today as it closed below on few important threshold point of 23556----23662----23673----24089----24204 & 24330(figure will change daily).

8. It has broken its recent bottom on the line chart.

TRADING CALL: --

1. Long trade can be tried on decline if it holds 23485 for some time with a stop loss of 23400 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 23670—23700 with a stop loss of 23770 or can sell if it moves below 23420 and maintain for some time with a stop loss of 23510.  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