A TECHNICAL UPDATE ON CNX-NIFTY-5.11.2024

 

CNX-NIFTY

Open-24315.75--High-24316.75—Low---23816.15--Close-23995.35 on 4.11.2024.

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

Resistance:24074.20/24099.70/24141.80/24472.80/24498.20/24567.65/24694.35/24753.15/24854.80/24885.15/24978.30/25078.30/25285.55/25333.65/25445.70/25847.35/26277.35/26328/26995/27095/27212/27293/27381.

OVERALL, VIEW: --   

It opened on a positive note and the open was almost the high for the day and thereafter it steadily moved down and finally ended the day with a loss of 309 points. The overall chart setup is very 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 importantly below few long term moving averages also which is very concerning, because long term uptrend is threatened, it has made lower top & bottom again and finally all the important technical indicators are negative now except for slight positive divergence, therefore all developments together indicates that further fall looks inevitable in coming days with in between relief rallies. The short & medium term trend is bearish and it has threatened the long term uptrend today and the threat will only dissipate once it moves above 24049----24163----24283(figure will change daily) and sustain on the closing basis.

Please note that it is important to mention here that to keep the up momentum going in the month of November-2024, it has to maintain above 24150.77---24205.35----24283---- 24302.70---24397- (some figure may change daily) and sustain on the closing basis, then the up-can extend, but it is well below this range now which is very concerning if it stays below it then it can head down further. It is important to mention here that now its key support point is at 23893(it broke this point intraday today but bounced back to close above it) and then it has bed of support in the range of 23765----23339, so this a very strong bounce back range and it is likely to stage a recovery once from this range, but break & sustained close below the above range may witness an accelerated down move.

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 23893.70-----23765----23617-----23572-----23502----23456----23393----23339(few figures may change daily) it can bounce back from any of these points, please note that now its key support point is 23893.70 levels, break and sustained close below this point 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. But please note that even if it breaks the above support point of 23893.70 moving down it has bed of strong support range between 23765----23339,  therefore it is likely to stage a recovery from  this range but break and sustained close below this range will 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----24397---24302.75----24283-----24205.35----24150.77(figure may change), if it moves above 24150.77(weak pullback threshold point) and sustain on the closing basis it can have a feeble up-move, if it moves above 24205.35---24283----24302.75 and sustain on the closing basis then it will get slight strength to move-up further,  if it moves above 24397(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 is likely that it will strongly extend 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 24457---24590---24632---24769----24824(figure may change) and sustain on the closing basis, and if it moves above 25210----25600----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 in the neutral zone now, and slight positive divergence on the daily chart is also there, so it may stage a rally anytime soon may be on 5.11.2024 itself but it may not  last because the overall technical setup is very weak and most importantly  huge negative divergence  is there on the  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 fall looks inevitable in coming days may be with an in between short relief rally at times and 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 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.

WEAKNESS: -.

1. All the 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.    

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---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 below almost all its short-term moving averages now on the daily chart and the important average range for the day is between 24263---24314----24352----24457----24590---24632---24824 (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 24397(figure may change) and also below weak pullback threshold point of 24150.77(figure may change).

6. The price action was weak today.

7. It has made lower top & bottom again on the line and bar chart both.

8. Its long term uptrend is threatened as it is below few of its long term moving averages placed at 24049---24163----24283(figure will change every day).

TRADING CALL: --

1. Long trade can be tried on decline near or within the range of 23900----23870 with a stop loss of 23800 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 24245—24300 with a stop loss of 24350 or can sell near 24073 if it remains below it with a stop loss of  24165 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