Indian equity benchmarks extended losses to the third day in a row on Tuesday, as renewed concerns about the Omicron variant of COVID-19 spooked investors globally.

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The Bank Nifty recovered nearly all of its intraday losses to end with a cut of 0.1 percent.

What do the charts suggest for Dalal Street now?

The Nifty50 has formed a small positive candle at the lows with minor upper and lower shadows, hinting at the formation of a high wave type pattern, according to Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

Normally, such a pattern following reasonable weakness alerts for a trend reversal, but a confirmation is required in this case, he said.

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Stuck in a range

The 50-scrip index will make a trending formation on the daily chart if it crosses 17,400 or breaks 17,200, said Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities. Above 17,400, there is a chance the Nifty will move on to 17,550/17,600 levels, and find significant support at the 17,000/16,950 levels below 17,200, he said.

Here are key things to know about the market before Wednesday's session:

SGX Nifty

At 7:48 am on Wednesday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty50 index -- were up 1.5 point at 17,334.5, suggesting a flat opening ahead on Dalal Street.

Global markets

Equities in other Asian markets were largely up but caution prevailed among investors ahead of a key policy meeting of the US central bank ahead. MSCI's broadest index of Asia Pacific shares outside Japan was up 0.1 percent in early hours. Japan's Nikkei 225 was down 0.1 percent, China's Shanghai Composite up 0.1 percent and Hong Kong's Hang Seng up 0.3 percent. S&P 500 futures were flat in Asia.

On Tuesday, the three main Wall Street indices ended 0.3-1.1 percent lower.

What to expect on Dalal Street

HDFC Securities' Shetti sees chances of a sustainable bounceback in the coming sessions. "Levels of 17,500 and then 17,650 are important hurdles to watch and immediate support is placed at 17,200," he said.

"The medium-term trend will remain bearish as long as the index does not cross the 17,650 level," said Kotak Securities' Chouhan, who expects commodity-related stocks to be in focus on Wednesday.

Key levels to watch out for

Nifty50: The index has support at 17,150 and resistance at 17,500, according to Palak Kothari of Choice Broking.

Bank Nifty: For the banking index, Kothari sees support at 36,300 and resistance at 37,700.

FII/DII activity

Foreign institutional investors (FIIs) net offloaded Indian equities worth Rs 763.2 crore on Tuesday. However, domestic institutional investors made net purchases of Rs 425.4 crore, according to provisional exchange data.

Call/put open interest

The maximum call open interest is accumulated at the strike price of 18,000 with more than 1.6 lakh contracts, and the next highest at 17,600 with more than 1.5 lakh contracts. On the other hand, the maximum put open interest is placed at 17,000 with nearly 89,000 contracts, according to exchange data.

This suggests immediate resistance at 17,600 followed by a major hurdle at the 18,000 mark, and meaningful support only at 17,000.

Long build-up

Here are five stocks that saw an increase in open interest as well as price, suggesting a build-up of long positions:

Long unwinding

Short-covering

Short build-up

(Increase in open interest and decrease in price)

52-week highs

In the BSE 500 index, Tech Mahindra, Adani Total Gas, APL Apollo Tubes, Birlasort, Minda Industries, Raymond and TTK Prestige were among the 10 stocks that hit 52-week highs.

52-week lows

On the other hand, only one stock in the broadest index on the bourse hit a 52-week low: Gulf Oil Lubricants.

Volatility index

NSE's India VIX index — which measures the expectation of volatility — jumped 2.3 percent to settle at the 17 level on Tuesday, continuing to rise for a second straight day.

(Edited by : Abhishek Jha)

First Published:Dec 14, 2021 6:23 PM IST