A TECHNICAL UPDATE ON CNX-BANK NIFTY—18.12.2024

 

CNX-BANK NIFTY

Open—53394.10--High—53515.70--Low—52709.40--Close—52834.80 on 17.12.2024. 

Support:52794.95/52782.75/52760.20/52577.50/52493.95/52354.85/51749.45/51693.50/51138.90/51133.20/51000.90/50947.70/50865.45/50438.30/50382.10/50369.40/50194.30/49974.75/49904.40/49787.10/49688.80/49654.65/49057.40/48636.45/48292.25/48203.45/48161.75/47363.40/46983.75/46077.85/45828.80/45661.75/44633.85/44429/43600.25/43345.45/43230.95/42582.20/42105.40. 

Resistance:53357.70/53531.30/53792.85/53888.30/54247.70/54467.35/54593/54604/54772/54815/54924/55097/55209/55444/55646/55740/55827/56135/56255.

OVERALL, VIEW: --

It opened on a negative note and thereafter had both side moves during the day and finally, ended the day flat with a loss of 746.55 points. Please note that the gap it created on 25.11.2024 is yet to be filled and the gap point is 51271. Please note that it is often exhibiting volatility, which is not a good sign for a steady market.

It is important to mention here that the wild movement it had on 13.12.2024 indicated that the top is already in the place, therefore, till it moves above 53888.30 and sustain on the closing basis the on-going up-move may end here and it may start to drift down and today’s move almost confirms that the up-move may have ended for now. Please note that I have cautioned about it in my write-up for 16.12.2024.  Furthermore it has closed below its immediate key support point of 53531.30----53370.43 & 52920.42 which is a very weak sign, however 52760 & 52648 and then 52087.65 & 52055.60 is the last recent key support point and if it manages to hold these point on the closing basis then there may be chance of a bounce back, else it may continue to move down.

The chart setup has weakened a bit today. It has broken its recent bottom on the line chart, it has fallen below majority of its short term moving average on the daily chart, but above all the medium and long term moving averages on the daily, weekly & monthly chart which is a hugely positive sign for the continuation of the up-move and if it sustain above the averages then the up-move is likely to extend. Furthermore half the important technical indicators are positive now on the daily chart and some indicate that it is in the buy mode. The concerning thing is that it is in the overbought zone and with distinct negative divergence and some indicate sell mode too, therefore all the indicators together are giving mixed signal. It is also important to mention here that the price action has not been consistently positive off late therefore it is suggested to keep an eye on price action for further directional indication. The long term uptrend is intact as of now. But it is in the short term corrective mode now.  

POSSIBLE MOVE ON THE UPSIDE:-

It has exhibited weakness today but if it holds 52760.20 & 52648(figure may change) and then 52087.65 & 52055.60 on the closing basis then there is a slim chance of a bounce back, else it will continue to slide down. Please note that it will get back into the strong up-momentum track only once it moves above   52920.42---53370.43---53531.30---53644.50 & 53888.30 and sustain on the closing basis and then it may retest its all-time high of 54467.35 or may go beyond it also. But if it stays below these points for a longer period of time on the closing basis then it may be heading for a reasonable to sharp fall in coming days.

POSSIBLE MOVE ON THE DOWNSIDE:-

Moving down from here it may find broad support at (for other support points see the table on the upside) 52757----52648-----52578----52541----52215----52132.82----52085-----52087.65----52055.60----52029------51998----51866----51732-----51670----51404----51368----51077-----51040----50891.64------50720----50617------50402------50083-------49654.65----49201.72-----48636.45---48292.25---48203.45---47756(figures may change), it can bounce back from any of these points, Please note that  today it has triggered fresh weakness and it slipped into short & deep corrective mode for its recent rise as it closed below its threshold points of 53531.30---53370.43 & 52920.42 , break & sustained close below 52760 & 52648 may put the up-move in jeopardy and thereafter break & sustained close below each point will weaken it, break & sustained close below 51732 will threaten the long term uptrend, break & sustained close below 50891.64 may end the possibility of the up move for a while and thereafter break & close below each point will weaken it further, but the range of 50378----50057----49787----49654 is the last very strong bounce back support range, if it break & sustain below this range on the closing basis, then it may have an accelerated fall. Please note that sustained close below 50083 may potentially end the long term uptrend for the time being and finally if it break the range of 48636.45---48292.25---48203.45---47756 and sustains on the closing basis then the correction could be more painful price-wise & time-wise both, which may please be noted.

TECHNICAL INDICATORS PLACEMENT ON THE WEEKLY & MONTHLY CHART:-

On the weekly chart indicators are giving mixed signal, it is in buy mode now, but there is huge negative divergence and in overbought zone. On the monthly chart it is in overbought zone and with huge negative divergence. 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.

IT IS SELL ON RISE MARKET NOW.;-

It has slipped into deep correction mode today for its recent rise, therefore it is sell on the rise market now till it closes above 52920.42  and sustain, but long trade can also be tried near critical support points for intraday gains.

STRENGTH: -

1. It is in the long-term uptrend.

2. It is well above its most critical points of 48203.45---48292.25 & 48636.45, please note that it must stay above all these points to keep up the strong up momentum going in the year 2024.

3 It is above its short & strong pullback threshold point of 52648 & 50891.64(figure may change), sustained close above this point will help in extending the up-move.

4.  Four out of seven technical indicators are positive on the daily chart with buy signal.

WEAKNESS: -

1. 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.

2. Please note that indicators, on the weekly chart are in buy mode but in overbought zone and with huge negative divergence & on the monthly chart, indicating overbought condition and with huge negative divergence.

3. Today it has fallen below few of its corrective threshold points of 53500.30-----53370.43---53331.55----, 52920.42 (figure may change) and if it sustain below these points then it may extend the down move. The other important key correction threshold points are 52487.43--- 52098.30------51549.93---- 50725.73---- 49201.72---45416.49 (figure may change)  

4 It is below its major short-term moving averages now on the daily chart and the important average range for day is between 53397----53357----53149-----53041-----52757----52578(figure will change every day), sustained close below this range can witness an accelerated down move.

5. It has broken its recent bottom on the line chart today.

6. The price action was weak today.

7.  Three out of seven technical indicators are negative on the daily chart with sell signal, distinct negative divergence and in overbought zone.

TRADING CALL: -- 

1. Long trade can be tried on decline near or within the range of 52760----52648 if it hold this range for some time, then with a stop loss of 52500 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 53250--53350 with a stop loss of 53500  or can sell if it moves below 52630  and maintain for some time with a stop loss of 52850.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

Email—suranank@gmail.com

Mobile—8240951127/9831313654.