A TECHNICAL UPDATE ON CNX-NIFTY-8.11.2024

 

CNX-NIFTY

Open-24489.60--High-24503.35—Low---24179.05--Close----24199.35 on 7.11.2024.

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 it steadily went down during the day and finally ended the day with a loss of 284.70 points. As expected the relief rally seems to have fizzled out, watch 1-2 trading session for the confirmation. 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 still has a higher top on the line & bar chart both, but it fell again below all its short & medium term moving averages on the daily chart, also below all short term moving averages on the weekly chart and most importantly it fell below one long term moving average also therefore threatening the long term uptrend however few important technical indicators are positive now with buy signal and there is a very strong  positive divergence on the daily chart which can extend the up-move, provided it moves above the  range of 24205.35---24302.70----24308----24367.34---24397 (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 24308(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 24205.35---24302.70----24308----24367.34---24397 (some figure may change daily) on the closing basis, then the up-move can extend, but break & sustained close below the above range can trigger fresh down move again.  

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 UPSIDE:-

Please note that it fell below its critical key points of 24205.35---24302.70----24308----24367.34---24397(figure may change) today ,which is a weak sign, if it moves above the range of 24205.35---24302.70----24308 and sustain on the closing basis, then it will get some strength, 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, but break & sustained close below this range may end the on-going up move, 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 24372---24528---24779---24843---24970(figure may change) and sustain on the closing basis, and if it moves above 25170----25600----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.

POSSIBLE MOVE ON THE DOWNSIDE:-

Moving down from here it may find good support at  24187----24108----24099.70---24074.20---24069----23893.70-----23816.15----23641-----23610-----23526----23495----23413----23376(few figures may change daily) it can bounce back from any of these points, but  break & close below each point will weaken it. Please note that moving down further its key support point is 23893.70(it tested this point in the recent down move twice), 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 23641----23376, 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 and it may seek much lower levels.

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 triggered buy signal  and positive divergence is there on the daily chart, which can possibly take it up to 24800+ level as of now, if price action supports, therefore it has to be seen how it pans out in the next 1-2 trading sessions, l  because the overall technical setup is still weak on the 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 directional indication and today’s fall indicates that the on-going up-move may be over.

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;

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. Four out of seven technical indicators are positive indicates oversold condition and positive divergence, triggered buy signal today, 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. Three out of  seven important technical indicators on the daily chart are negative, indicating oversold condition, almost 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--- (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 24372----24528---248043---24843---24924 (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).

6. The price action was weak today.

7. It threatened the long term uptrend today as it closed below on important threshold point of 24308(figure will change daily).

TRADING CALL: --

1. Long trade can be tried on decline near or within the range of 24100---24073 with a stop loss of 24000 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 24450—24500 with a stop loss of 24550 or can sell if it moves below 24179 with a stop loss of 24270. 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