Friday was the first day after a while when the market looked beyond the Adani issue and witnessed a proper day of gains. It is looking better, it's looking much better, out of the ICU, perhaps into the general ward and maybe out of the hospital very soon, as well.

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The impact in the broader market of the Adani story perhaps should diminish over a period of time and that process has already started on Friday.

Benchmark indices closed at the day's high on Friday with the Sensex and Nifty 50 closing with gains of over a percent each. Both of them regained half of last week's losses with the Sensex gaining 2.5 percent and the Nifty 1.5 percent. Financials were the outperformers last week. The Nifty Bank gained 3 percent last week to post its biggest weekly rise in a month.

Amidst all of this, the global market is looking much better, the Nasdaq particularly is up 16 percent on a year-to-date basis.

"In in my view, I think market is at a pretty good position, in terms of the risk-reward ratio, and probably may see some amount of recovery from here onwards in the ground that the budget has been excellent," Vaibhav Sanghavi of Co-CEO at Avendus Capital Alternate Strategies told CNBC-TV18.

What do the charts suggest for Dalal Street?

Sameet Chavan of Angel One believes that while immediate support for the Nifty 50 is seen at 17,600, the sacred zone for the index is seen between 17,400 - 17,300. However, he believes that for the index to complete the recent corrective trend and resume an uptrend, it has to surpass 18,000 - 18,100 on a closing basis.

Here are key things to know about the market ahead of the trading session on February 06:

SGX Nifty

On Monday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty 50 index — declined 40 points or 0.22 percent to 17,800, thereby pointing to a subdued opening for the market.

Global Markets

US markets did not take a strong jobs report well with the S&P 500 and Nasdaq ending over 1 percent lower. The Dow Jones also declined over 100 point.

Despite the drop, the S&P 500 notched its fourth weekly gain in the last five weeks. The US economy added 5.17 lakh jobs in January, way above the estimate of 1.87 lakh. The 10-year treasury yield topped 3.5 percent post this report.

The US market did not take the jobs number well and there is a possibility that worries emerging that the Federal reserve will keep hiking rates because the labour market, which is the number one thing they are watching is still very tight. So that is an important one.

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What to expect on Dalal Street

Nagaraj Shetti believes that the Nifty 50 on its weekly chart closed at the edge of a previous downside breakout at around 17,800. Technically, such a pattern indicates a false downside breakout of the range and is likely to open the doors of an upside target of around 18,250.

Rohan Patil of SAMCO Securities expects a strong directional move on either side as there has been a range contraction on the Nifty 50's weekly chart. He expects the index to fall towards 17,200 - 17,000 in case its breaks below its strong support of 17,400. Only a sustained close above 18,250 can take the index higher towards 18,500.

Key Levels To Track

Just two levels on the Nifty 50. It is very close to the 20-day moving average, which is now at 17,896. For the Nifty Bank index, that level is at 41,821.

For the weekly options expiry on February 9, the 18,000 strike call of the Nifty 50 added 19.1 lakh shares in Open Interest, followed by the 18,100 call, which added 18.2 lakh shares.

On the downside, the 17,700 put added 43.3 lakh shares in Open Interest, while the 17,600 put added 31.8 lakh shares.

Currently, the Nifty 50's Put-Call Ratio stands at 1.16 from 0.94. Adani Ports continues to remain in the F&O ban while Ambuja Cements exits.

FII/DII activity

FIIs have been selling and we have heard this over and over again that FIIs are selling expensive markets and they are buying cheap markets.

One important data point is the Chinese market is now up 60 percent from the October lows. It is not trading at 11-12 times anymore, but at 18 times one-year forward earnings, which by its own historical average and by other yardsticks is not cheap at all.

So at some point, there will be a reversal of the reversal, which goes back to what foreign investors have done, which is buying high-quality markets like India and a couple of others as well.

The only problem has been corporate earnings, which have seen more downgrades as compared to upgrades. This is true for the consumer sector, and so many others and has continued all through the earnings season.

Hopefully, the broader market impact diminishes even as Adani issue is not going to fade away very soon. It will continue to fester in some way or the other but the market hopefully moves on.

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(Edited by : Hormaz Fatakia)