The Nifty has been trading near the 78.6 percentretracement of the entire September decline throughout the last week. The key Fibonacci level is near 17800. On October 28, the index attempted to stretch beyond this level on an intraday basis however couldn’t sustain in the higher territory. The hourly chart shows that the index is in process of forming a distribution near this key hurdle. The hourly momentum indicator has developed a negative divergence, which is a sign of exhaustion. The overall structure shows that the next move down could be around the corner. The immediate support zone is at 17,720-17,700. Once that is breached then the index can tumble towards 17,500 in the short term.
