17703-809 key support for Nifty

The Indian equity market paused after an impulse move. With the profit booking at higher levels, the benchmark indices declined. NSE Nifty was down by 0.58 per cent or 96 points and settled at 17957.40. Monday's leading sectors, Bank Nifty and Fin Nifty, declined by 1.47 per cent and 1.59 per cent, respectively. The Private Bank sector index was down by 1.53 per cent. But, the PSU bank index is up by 0.47 per cent. The FMCG, Auto, Energy and Midcap-100 indices advanced by 1 -1.5 per cent. The market breadth is positive as 1446 advances and 634 declines. About 80 stocks hit a new 52-week high and 275 stocks traded in the upper circuit. SBI Card, Tata Power and HDFC Bank were the top trading counters. The VIX is up by 3.24 per cent.

The benchmark indices erased some of the huge previous day's gains. The Nifty traded in the range during the day and closed at almost a day's low. It failed to move above the prior day's high. The sideways move may continue for another one or two days. As stated in the previous analysis, the 18000-18150 zone is very crucial for the market to move higher and higher. After a 10 per cent rise, the HDFC twins closed with a 2-2.9 per cent down. Barring PNB and AU Bank, all the other Banking stocks were closed negatively on Tuesday. Monday's leading sector, Financial services stocks also declined by 1.58 per cent.

With the heavyweight sectors declining, the Nifty also closed weak. Unless a decisive weekly close above the downward channel, be with a cautious approach. The gap area of 17703-809 is the key support for now. At the same time, the Nifty may spend some time in the 17700-18150 zone. We may not get decisive trades in this zone. In any case, the closes below the 17700 support, we need to observe the pattern during this counter-trend. If a decline breaches the 17700 support, the market starts another round of down move within the channel.

(The author is Chief Mentor, Indus School of Technical Analysis, Financial Journalist, Technical Analyst, Trainer and Family Fund Manager)