The last five trading sessions have thrown up two very interesting observations. First, no matter how low the Nifty 50 index has fallen on an intraday basis, it always rebounds by the close of trade to end above the 17,600 mark.

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Secondly, the index has seen support emerge between 17,400 and 17,500. Barring the Budget-day collapse towards 17,353, three out of the last five sessions have seen intraday lows of 17,451, 17,405 and 17,537.

Another constant over the last few days has been volatility. On Thursday's weekly options expiry session, the Nifty 50 traded in a 200 point range before ending near the flat line.

After the first month of 2023, the Nifty 50 is significantly underperforming its global counterparts. The index is down 3 percent for the year, compared to the S&P 500 which is up nearly 10 percent and the Nasdaq, which is up over 15 percent so far. However, N Jayakumar of Prime Securities believes that despite the volatility, the Indian markets have been resilient and that he does not expect the market to continue to significantly underperform.

What do the charts suggest for Dalal Street?

The Nifty 50 formed a small positive candle on its daily chart on Thursday with minor upper and lower shadow, observed Nagaraj Shetti of HDFC Securities. Technically, this pattern indicates that the market is in a near-term bottom and may have a pullback in the coming sessions. He expects the index to head towards its resistance zone of 17,800 before another round of downward correction begins.

Rupak De of LKP Securities believes that the trend of the Nifty 50 remains negative with the Relative Strength Index (RSI) trending upside down. He sees any potential upside to find resistance at the 17,750 mark. A sustained move above these levels can take the index further to 17,950. On the lower end, support is visible at 17,450, below which the correction may resume.

Here are key things to know about the market ahead of the trading session on February 03:

SGX Nifty

On Friday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty 50 index — increased 43.5 points or 0.25 percent to 17,682.5, thereby pointing to a subdued opening for the market.

Global Markets

Benchmark indices on Wall Street ended mixed on Thursday. The Nasdaq rose 3.2 percen for its best day since November while the S&P 500 gained 1.5 percent. However, the Dow Jones ended slightly lower, weighed down by healthcare stocks.

However, the US stock futures are now trading lower, the Nasdaq in particular after results from Apple, Alphabet and Amazon disappointed the street. All three tech giants reported results after closing and declined in after-hours trading.

What to expect on Dalal Street

Rohan Patil of SAMCO Securities believes that any breakout on either side of the 17,400 - 17,900 range can trigger the next directional move on the Nifty 50. He expects the immediate sentiment to remain weak as long as the index remains below its 9-day exponential moving average of 17,758.

The 17,700 - 17,750 is a crucial level on the upside for the Nifty 50, according to Ruchit Jain of 5paisa.com. He also observed that the Nifty Midcap100 index is trading near an important support zone as the budget-day low of 26,900 is similar to the previous two lows of September and December last year. He advises traders to keep a close watch on that level and remain very stock specific for short-term trading.

Key Levels To Track

For next week's options expiry on February 09, the 18,500 strike call of the Nifty 50 added 44.33 lakh shares in Open Interest, whereas the 18,000 call added 21.76 lakh shares. The 17,600 call saw addition of 29.08 lakh shares.

On the downside, the 16,100 put added 33.49 lakh shares while the 17,600 put added 25.56 lakh shares.

Nifty's put-call ratio managed to inch closer to the mark of 1, ending at 0.94 from 0.70 on Wednesday.

Ambuja Cements remains in the F&O ban while Adani Ports is the latest entrant into the ban period. Adani Enterprises, Adani Ports and Ambuja Cements are also the latest entrants in the short-term ASM framework.

FII/DII activity

Selling from FIIs resumed on Thursday after a brief pause on Wednesday courtesy of the Syngene block deal. However, N Jayakumar of Prime Securities believes that after selling nearly Rs 40,000 crore last month, selling from foreign investors may have peaked.

Long Build-up (Increase In Price and Open Interest)

Short Build-up (Decrease In Price and Increase In Open Interest)