A TECHNICAL UPDATE ON CNX-BANK NIFTY—6.12.2024

 

CNX-BANK NIFTY

Open—53354.45--High—53888.30--Low—52850.35--Close—53603.55 on 5.12.2024. 

Support:53357.70/53180.75/52794.95/52782.75/52760.20/52577.50/52493.95/52354.85/51996.65/51750.10/51138.90/51133.20/51000.90/50947.70/50865.45/50438.30/50382.10/50369.40/50194.30/49974.75/49904.40/49787.10/49688.80/49654.65. 

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

OVERALL, VIEW: --

It opened on a positive note and thereafter had both side moves during the day and finally ended the day with a gain of 336.65 points. The stipulated time to fill the gap it created on 25.11.2024 is over therefore the chances of filling the gap has receded for now but some day it fill the gap for sure(gap point is 51271), which may please be noted. Please note that it is exhibiting huge volatility, which is not good for a steady market.

It had 5^th up day in a row today and it is showing extraordinary strength for continuing the on-going up-move, but straight rise in a row makes it vulnerable for correction also, so be watchful. Please note that moving down if it hold the points of 53531.30---53370.43 & 52920.42(figure may change) then the up-rally can extend further and in a weak case scenario if it holds the point 51487 & 50891.64 (some figure may change), even then the chances of up-move will be alive, but break & sustained close below 53531.30 may lose up-momentum steam, break & sustained close below 53370.43 & 52920.42 will push it into short & deep corrective mode respectively again for its recent rise, break & sustained close below 51487 will threaten the long term uptrend again, break & sustained close below 50891.64 (figure may change) may end the possibility of continuing the up move for good for a while.

The overall chart setup has turned very strong it is above all its short, 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 it then the up-move is surely going to extend. Furthermore almost all the important technical indicators are positive now on the daily chart and indicate that it is in the buy mode. The only concerning thing is that it is in the overbought zone, so it may correct any time soon and then may resume the up-move again. So all together indicators are giving positive signal on the daily chart as of now therefore it is likely to move-up in coming days provided it holds the key points as stated in the above paragraph. The long term uptrend is intact as of now. The bias is bullish as of now but be watchful because of the huge volatility.

POSSIBLE MOVE ON THE UPSIDE:-

It is showing great strength and today it closed above its key point of 53531.30 and if it sustains above it on the closing basis, then it could retest its all-time high of 54467.35 or may go beyond it also, but if it fails to sustain above it on the closing basis then it may lose up-momentum steam and may drift down.

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) 53531.30---53370.43----52920.42----52635----52546----52347----52235---52087.65----52055.60----52016-----51990---51845-----51696-----51525----51487---51157----51092----50891.64----50828------50764----50617------50474----50472------50154------49834---49830-------49654.65----49201.72-----48636.45---48292.25---48203.45---47756(figures may change), it can bounce back from any of these points, but break & sustained close below 53531.30 may lose up momentum steam, break & sustained close below 53370.43 will push it into short corrective mode for its recent rise, break & sustained close below 52920.42 will push it into deep corrective mode  for its recent rise and thereafter break & sustained close below each point will weaken it, break & sustained close below 51487 will threaten the long term uptrend, break & sustained close below 50891.64 may end the possibility of the up move for a while, break & sustained close below 50764 may trigger fresh fall and thereafter break & close below each point will weaken it further, but the range of 50154----49830----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 49830 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 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. 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 still bearish as of now. 

IT IS BUY ON DECLINE MARKERT NOW.;-

It is buy on decline market now till it holds 53531.30---53370.43 & 52920.42(figure may change) but short trade can also be attempted  after a reasonable rise for intraday corrective gain. It could be a risky trade but worth trying.

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 well above its strong pullback threshold point of 50891.64(figure may change), sustained close above this point will help in extending the up-move.

4. All the important technical indicators are positive on the daily chart with buy signal, but in overbought zone as of now.

5. The price action was positive today.

6 It is above all its short-term moving averages now on the daily chart and the important average range for day is between 52635----52424----52347-----52016-----51990----51696----51092-----50764(figure will change every day), sustained close above this range can help it extend the up-move.

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

8. It is above almost all its corrective threshold points except for one at  53636.71----- (figures may change). The other important correction threshold points are at 53500.30--- 53370.43---53331.55---- 52920.42----52487.43--- 52098.30-----52015.06----51549.93---- 51492.11 ---- 50725.73---- 49201.72---45416.49 (figure may change) and if it sustain above these points then it will help in extending the up-move.

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 is oversold (so it may rally a bit), but in sell mode and with huge negative divergence & monthly chart, indicating overbought condition and huge negative divergence.

TRADING CALL: -- 

1. Long trade can be tried on decline near or within the range of 53530----53370   with a stop loss of 53050 for a possible intraday gain, else avoid.

2. Short trade can be tried on the rise near or within the range of 54300---54400 with a stop loss of 54500. 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.