The course I want is below the one i got offered and only around 40 something was offered in first round. I do meet the prerequisites and the clearly in Atar. So I have a good chance?
Unless the "40 something" that was offered filled the course quota set by the university, you have a very strong chance. Put it as your #1 if you really want it. Places are also capped based on place type - e.g. CSP/full fee. Only a certain number of CSP places are allocated for each course.
I'd accept the offer from round 1 first to make sure you have a fallback in case nothing else happens (you can withdraw from it if you get something else in round 2) and have a backup preference for round 2. Make sure you are in the best position and don't assume you'll get something in future rounds.
Move the offered preference to the bottom because only everything above the preference offered in round 1 is considered for round 2 (same process for rounds 3+). Same process applies: only the highest offer made to you in terms of your preferences is shown. The rest are ignored.
It could have very well been the case that you were offered a place, but given you were offered something higher, you won't know whether you received it or not from round 1.
That's really unfortunate. You are definitely in the same position as me back in early 2016.