A TECHNICAL UPDATE ON CNX-NIFTY-25.11.2024

 

CNX-NIFTY

Open—23411.80—High—23956.30---Low---23359---Close----23907.25 on 22.11.2024.

Support:23893.70/23816.15/23667.20/23664/23484.15/23350/23338.70/23110.80/22794.70/22775.70/22525.65/22303.80/21875.25/21860.25/21821.05/21777.65/21710.20/21530.20/21281.45/21137.20/20976.80.

Resistance: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 ON THE DAILY CHART: --   

It opened on a positive note and did not move much lower after that and then steadily moved up during the day and finally ended the day with a robust gain of 557.35 points. After a long time today’s up-move was pretty strong and it sustained at the upper level and closed near the high of the day and the most important thing was that it closed way above its last critical support range of 23542----23428----23350 & above its decider point of 23893.70 which is good sign and if it sustain above the decider point on the closing basis, then it can be assumed that the broad correction may be over and it may begin the steady up-journey again. But in this context please note that if it fails to sustain above the point & the range as mentioned above then the fall could be much sharp this time. It is also important to mention here that if it moves above 23974.50 and sustain on the closing basis then it will somewhat make sure that the up-move will extend for sure and then the broad upside target could 24051----24237----24283----24340---24415---24538----24770----25126---25566---25675, please note that it may correct at any of these point and then may resume the up-move again. I once again reiterate that break & sustained close below 23893.70 may derail the on –going up- move again.

The overall chart setup is still weak, despite today’s sharp up-move; it is already into the deep correction mode. But it made higher top on the line & bar chart today, it bounced back above few short term moving average but majorly below its short & all 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 also and most importantly it is also below few long terms moving average on the daily chart, therefore long term uptrend is still under threat, which is concerning. Furthermore all the important technical indicators are negative and sell mode is on and positive divergence has also been negated on the daily chart but oversold condition is still there, therefore all together indicators are giving mixed signal and fall may be ahead in coming days provided it breaks & sustain below the point & the range mentioned above in the first paragraph. The short & medium term trend is bearish and the long term uptrend is still under threat and the threat will only dissipate once it moves above 24087---24210 & 24340(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 UPSIDE:-

Please note that  if it holds 23893.70 level on the closing, the it can be assumed the broad correction may be over and it is ready to move up, if it moves above 23974.50(strong pullback threshold point) and sustain on the closing basis then it will  make sure that the up-move can extend further for sure, if it moves above 24160 and sustain on the closing basis it will strengthen it further, if it moves above 24331 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 24687---24732---24781----24939(figure may change) and sustain on the closing basis, and if it moves above 25566 & 25675(figure may change) and sustain on the closing basis then it may gain extraordinary strength and will get into the good up momentum track and then it can retest its all-time high of 26277.35 or may go beyond it also.

POSSIBLE MOVE ON THE DOWNSIDE:-

Moving down from here it may find good support at 23893.70----23711-----23664----23593----23542------23474------23428-----23338.70---23263.15------23110.80---22794.70----22775---22281---22165(few figures may change daily). Please note that break & sustained close below 23893.70 will clearly indicate that  big correction is not yet over and if it sustains below it for a longer period of time then the correction could be more painful price-wise and time-wise both. Thereafter break & close below each point will weaken it further and finally moving down its last strong support range could be between 23542---23428(figure will change daily) and then 23350---23263(figure will change daily),break & sustained close below the range of 23542---23428 may trigger fresh fall and break & sustained close below the range of23350---23263may accelerate the fall.

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.  

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 it is under threat.

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 technical indicators suggests oversold condition, so it may have a relief rally anytime soon and it did gave strong one today.

4. It has made higher top on the line & bar chart both.

5. The price action was positive today.

WEAKNESS: -.

1. Six 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---- (figures may change). The other important correction threshold points are at 23659.18--- 21848.52 (figure may change) and if it sustain below these points correction will deepen. 

4. It is above some & below some of  its short & medium-term moving averages now on the daily chart and the important average range for the day is between 23654-----23765----23769-----24039---24156----24687---24732---24781---24939 (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 23974.50(figure may change).

6. It has potentially threatened the long term uptrend as it is below all its important threshold point of 24087---24204 & 24331(figure will change daily) on the daily chart.

TRADING CALL: --

1. Long trade can be tried near 23893.70 if it holds this range for some time with a stop loss of 23800 or if it moves above 23957 and maintain for some time with a stop loss of 23850 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 24280—24360 with a stop loss of 24420 or can sell if it moves below 23850 and maintain for some time with a stop loss of 23970.  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