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Trade Set-up for December 18: The Indian stock market benchmark indices, Sensex and Nifty 50, are likely to open flat but in the red on Thursday, December 17 after 3 sessions of losses following weak trends in the global markets.

The trends on Gift Nifty indicate a muted start for the Indian benchmark index. The Gift Nifty was trading near 25,871 level, down 15 points or 0.06% from the Nifty futures’ previous close.

The Indian stock market extended its losing streak for a third straight session on Wednesday, December 17, as persistent worries over the rupee’s weakness, sustained foreign capital outflows and delays in the India-US trade agreement weighed on sentiment. The Sensex slipped 120 points, or 0.14%, to close at 84,559.65, while the Nifty 50 fell 42 points, or 0.16%, to finish at 25,818.55.

The pressure was more pronounced in the broader market, with the BSE Midcap index declining 0.53% and the Smallcap index dropping 0.85%. The widespread sell-off eroded investor wealth sharply, pulling the total market capitalisation of BSE-listed firms down to ₹466 lakh crore from ₹467.64 lakh crore in the previous session — a single-day loss of ₹1.6 lakh crore.

The Sensex continued to drift lower on Tuesday, setting the stage for a potentially decisive week ahead as the index approaches key technical levels that could shape its near-term trajectory. Market analysts believe the current consolidation phase may soon give way to a sharper move, with upcoming sessions likely to determine whether the index stabilises or slips into a deeper corrective pattern.

Shrikant Chouhan, Head of Equity Research at Kotak Securities, said the index struggled to sustain early gains. “Technically, after a muted open, Sensex faced resistance near 84,900 and reversed sharply,” he noted. Chouhan added that a bearish candle on the daily chart and a lower-top structure on intraday charts signal pressure building on the upside. “We are of the view that intraday sentiment is weak, but a fresh selloff is possible only if 84,300 is broken. If that happens, the market could retest 84,000–83,800. On the flip side, a move above 84,900 could lift sentiment and push the index to 85,200–85,400,” he said.

Mayank Jain, Market Analyst at Share.Market, echoed the importance of the same technical band. He noted that the 84,000–84,300 zone may serve as a key support area because it aligns with the 50-day moving average and recent swing lows. On the upside, he said the 85,000–85,100 range may act as immediate resistance. Jain added that weekly options positioning also shows maximum call open interest at the 85,000 strike, reinforcing it as a major ceiling for the index.

The derivatives market reflected growing caution on Wednesday as call writers added significant positions at at-the-money and nearby strikes, capping every market bounce. Put writers simultaneously unwound higher strikes and shifted to lower levels, indicating expectations of extended consolidation. Heavy call open interest of 1.68 crore contracts at the 26,000 strike has created a strong resistance zone, while 69.36 lakh puts at 25,500 offer notable support.

“The sharp drop in the Put-Call Ratio to 0.55 highlights rising caution and shows that sellers remain aggressive at higher levels,” said Dhupesh Dhameja, Derivatives Research Analyst at SAMCO Securities. He added that with PCR nearing oversold territory, brief short-covering phases cannot be ruled out.

The Nifty 50 remained range-bound on Wednesday as technical indicators pointed to an impending shift in trend, with analysts cautioning that global developments and currency volatility may steer market direction in the coming sessions. The index is currently trading between its 20-day and 50-day EMAs, which are converging—a signal that the next move could be decisive.

Osho Krishan, Chief Manager – Technical and Derivative Research at Angel One, said the immediate support lies at 25,750–25,700, aligned with the 50 DEMA and last week’s lows. A breakdown below this level, he warned, could disrupt the near-term structure. On the upside, the 25,950 20-DEMA, followed by 26,000, remains a strong resistance zone. He added that traders should stay cautious amid global uncertainties and currency swings, avoiding aggressive positions until clarity emerges.

Ajit Mishra, SVP – Research at Religare Broking, said choppy action is likely to continue as mixed global cues and currency fluctuations weigh on sentiment. He highlighted 25,700 as the key support, with a breach potentially pushing the index toward 25,450, while resistance remains firm at 25,950–26,050. Mishra advised a stock-specific approach with controlled position sizes in the current volatile environment.

The Bank Nifty may be heading into a crucial phase as technical indicators point to a narrowing range that could soon trigger a sharper directional move. With the index slipping closer to key support levels, analysts believe the next few sessions could determine whether the market stabilises or enters a deeper corrective cycle.

Hrishikesh Yedve, AVP – Technical and Derivative Research at Asit C. Mehta Investment Intermediates Ltd., said the index struggled to hold early levels as selling pressure intensified through the day. “If the index manages to hold the 58,800 level, then short-term relief might be possible. A firm break below 58,800 could extend the weakness towards the 58,500–58,000 levels. On the upside, 60,000–60,120 will act as a stiff resistance zone. Therefore, short-term traders are advised to book profits on every bounce.”

Vatsal Bhuva, Technical Analyst at LKP Securities, noted that selling pressure has become more evident on the charts, with the index slipping below important moving averages. “Momentum indicators also reflect caution, as the RSI is forming lower tops, indicating weakening strength in the index,” he said. Bhuva added that immediate support remains at 58,800, while resistance is capped near 59,300, with a decisive breach below support likely to pull the index toward its 50-day SMA around 58,350.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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