Market Insight: Resistance is at 16,923 and 17,400 level

Benchmark Index ends with rangebound play as its day range was well within the previous day making it an NR1 pattern indicating compression.

Price action, as suggested, is overdue for this compression after a prolonged continuous expansion. The market is holding onto the key support it established in December at 16,400 and that is the last line in the sand for bulls as a close below that will indicate deeper correction in the offing.

It is important to note Nifty bank is below its crucial short and long-term moving average. Technically, it is the strength in metals for the last few days that is helping Index to sustain and today it was much the same along with HDFC Life, Tata Steel, Hindalco, and Reliance.

On the upside, the resistance is placed at 16,923 and 17,400 in the short term while on the downside 16,400 holds the key.

(The author is Technical Analyst at Finversify)