Momentum waning slowly

The stock market traded in a dull year-end mood. In the last 30 minutes, a flash sale euphoria pulled the indices down. The NSE Nifty declined by 70 points from the day high and settled with just 19.65 points loss. It closed at 17213.60. Nifty Pharma is the top gainer with 1.71 per cent and the Auto index up by 0.42 per cent. The Nifty Small-cap-100 index advanced by 0.59 per cent, and Midcap-100 index up by 0.13 per cent.

The other indices declined with modest losses. The metal index is the top loser with 1.05 per cent. The media index was down by 0.97 per cent. The other sector indices down by less than 0.5 per cent. The market breadth is positive as 1076 advances and 957 declines. About 132 stocks hit 52-week high, and 195 stocks traded in the upper circuit.

Traded in mostly in the sideways, but a sudden sell-off in the last 30 minutes, the Nifty declined sharply. The Nifty has formed a shooting star Doji candle, which is bearish. Index mostly traded in the opening hour range. As mentioned on Tuesday, the momentum is waning slowly a day before the December derivatives expiry. After muted trading for ten hours, the index suddenly declined with flash selling pressure. In the last 30 minutes, it went sharply down by 80 points.

The stochastic oscillator is about to give a sell signal in an extreme overbought condition. The RSI failed to sustain above the 50 zone. On a 75 minutes chart, the RSI closed below the prior swing low, and the MACD is about to give a sell signal. The 61.8 per cent retracement level of 17170 is a crucial support for now. Below this level, it may fill the gap and test the 17079 level. It took support at 20DMA for the day and is placed at 17164. So, breaking below the 17164-170 zone of support will open a fresh leg of the down move. As stated earlier, the counter-trend may end if the index fails to close above the 17285. On derivative expiry day, watch for the 17164-285 zone for a decisive trade.