Technical Analysis of

CNX Nifty
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Introduction

Understanding CNX Nifty

•The S&P CNX Nifty, also known as the Nifty 50, is a stock market index that
comprises the 50 largest and most liquid Indian companies.

•It serves as a benchmark for the Indian stock market and is widely followed by
investors and analysts.
Relative Strength Index (RSI)

The RSI is a momentum oscillator that measures the speed and magnitude of price
movements. It is calculated as follows:

RSI = 100 - (100 / (1 + (Average Gain / Average Loss)))

An RSI reading above 70 indicates that the index is overbought, while a reading below 30
indicates that it is oversold.

Short term: The RSI is currently at 67.72, which is above the overbought threshold of 70.
This suggests that the index may be due for a correction.

Long term: The RSI is currently above its 50-period moving average, which suggests that
the index is in a bullish trend.
Moving Averages

Moving averages are used to smooth out price data and identify trends. A moving
average is calculated by averaging the closing prices of a security over a given
number of periods.

•Short term: The 20-period moving average is currently at 18,719.43, while the 50-
period moving average is currently at 18,267.99. The index is currently above both
of its moving averages, which suggests that it is in a bullish trend.

•Long term: The 200-period moving average is currently at 17,281.66. The index is
currently above its 200-period moving average, which suggests that it is in a long-
term bullish trend.
Oscillators

Oscillators are used to measure the momentum of price movements. They can be used to identify
overbought and oversold conditions.

Stochastic oscillator: The stochastic oscillator is a momentum indicator that compares the closing price of a
security to a range of its prices over a given period. It is calculated as follows:
%K = (Closing Price - Lowest Low)/(Highest High - Lowest Low) * 100 %
D = 3 * %K
A reading of %K above 80 or %D above 20 indicates that the index is overbought, while a reading of %K below
20 or %D below 80 indicates that it is oversold.

Short term: The %K stochastic oscillator is currently at 92.49, and the %D stochastic oscillator is currently at
81.33. Both %K and %D are above their respective overbought thresholds, which suggests that the index is
overbought.

Long term: The %K stochastic oscillator is currently above its %D stochastic oscillator, which suggests that
the index is in a bullish trend.
Short-term Technical Analysis

Decoding Market Momentum

•Relative Strength Index (RSI)

• Currently in oversold territory, suggesting a potential rebound
• Uptrend since October 2023, indicating underlying bullish momentum

•Moving Averages (MA)

• 20-day MA below 50-day MA, a bearish signal
• 20-day MA above 200-day MA, a bullish signal

•Oscillators
• Stochastic oscillator and Williams' %R oscillator in oversold territory,
signalling a potential rebound
Long-term Technical Analysis

Identifying Underlying Trends

•Relative Strength Index (RSI)

• Uptrend since October 2023, confirming a long-term uptrend

•Moving Averages (MA)

• 200-day MA trending upwards since March 2023, solidifying a long-term uptrend

•Oscillators
• Stochastic oscillator and Williams' %R oscillator exhibiting uptrends, validating a
long-term uptrend
Overall Analysis

Reconciling Short-term and Long-term Perspectives

•Short-term: CNX Nifty is currently oversold, hinting at a potential rebound

•Long-term: The underlying momentum remains bullish, suggesting a

continuation of the uptrend

•Key Levels to Watch:

• Support: 19,000
• Resistance: 20,000
Additional Technical Indicators

Gaining Deeper Insights

•MACD: Currently below the signal line, a bearish signal

• MACD histogram positive, indicating underlying bullish momentum

•Bollinger Bands: Price of CNX Nifty below the lower Bollinger Band, suggesting
oversold conditions
• Widening Bollinger Bands imply potential market volatility
Conclusion

CNX Nifty: A Tale of Short-term Oversold and Long-term Bullishness

•CNX Nifty presents an opportunity for a potential rebound in the short term

•The long-term trend remains bullish, emphasizing the underlying strength

•Investors should carefully consider technical indicators and market conditions

before making investment decisions