On the morning of December 20, the Nifty benchmark reached a new peak, only to experience its most significant single-day decline in the past nine months by the end of a volatile day of trading. Beginning the day above 21,500 and reaching a high of 21,593 in the first hour, the index later relinquished these gains due to profit-booking activities, resulting in a substantial fall of 303 points or 1.41 percent—the most substantial drop since March 13. The day concluded with the index at 21,150 in the red.
Given the high valuations, experts had anticipated profit booking. Analysts suggest that the index may seek support around 21,000, followed by a crucial support level at 20,800, aligning with the 20-day exponential moving average (EMA). A decisive breach of this support level could intensify the correction. Should there be a rebound, experts identify 20,300-20,400 as the immediate resistance levels.
The relative strength index (RSI), a momentum indicator, recorded a negative crossover at 68 levels and sharply retreated from the overbought zone, typically observed above 80.