Those hoping to see the Nifty 50 close above the mark of 17,000, maybe even touch 17,100, were left disappointed on Monday. The final 30 minutes of trade saw the index fall over 100 points from the day's high.

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Although the Nifty 50 remained above the mark of 17,000 for majority of the day, it failed to sustain above those levels, ending at 16,985.

Another striking feature of Monday's session was the fact that the Nifty 50 failed to cross Friday's intraday high of 17,109, and reversed from a high of 17,091. On the other hand, Monday's low of 16,918 was similar to Friday's low of 16,917.

The collapse in the final minutes came from Reliance Industries, which still remained the top contributor, but gave up some of the gains, and HDFC Bank, whose contribution in point-terms fell to single-digits from double-digits through most parts of the session. Losses were also accelerated by ICICI Bank, Axis Bank and Bajaj Finance.

The giving up of gains on Monday meant that the Nifty 50 is still down over 500 points for the March F&O series which expires tomorrow.

"I think we're going to be in a rangebound and volatile market for at least the next couple of weeks. And again, that's why keeping that defensive bias and not chasing the market in either direction, really makes a lot of sense. Because we're going to see highs, we're going to see lows, and we just need to wait and see how it plays out," Matt Orton of Raymond James Investment told CNBC-TV18.

What do the charts suggest for Dalal Street?

"I think long term investors have a great opportunity to get invested on a 12 month basis, not ruling out even an all-time high in the Nifty 50, so that is I think the short to medium term setup. I know I am sounding far more optimistic than what this street is sounding, which is why I said that fear is the enemy and you need to take it that way," Rohit Srivastava of Indiacharts.com told CNBC-TV18.

Ruchit Jain of 5paisa.com maintains the Nifty range to be between 16,850 - 16,900 and 17,100 - 17,200. Even as the index is locked in a range, the midcap and smallcap indices have broken their important medium term support levels. He advises caution and avoiding aggressive trades in this space until reversal signs are seen.

Pressure on higher levels was also witnessed by the Nifty Bank index, with 39,800 - 40,000 turning out to be a pressure zone. Kunal Shah of LKP Securities said that a breakout on either side of the 39,000 - 40,000 range will lead to trending moves in the index. The highest call Open Interest build-up at 40,000 may trigger a sharp short covering, in case the index sustains above that mark.

Here are key things to know about the market ahead of the trading session on March 28:

SGX Nifty

On Tuesday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty 50 index — gained 59.5 points or 0.35 percent to 17,072, thereby pointing to a positive opening for the market.

Global Markets

Asian markets have opened higher, extending moves from Monday as investor fears over the recent banking turmoil are easing.

The Nikkei 225 has opened 0.3 percent higher, while the Topix is up 0.6 percent. The Australian benchmark ASX 200 is up over 1 percent. South Korean indices trade with modest gains while futures in Hong Kong are also pointing to a positive open.

Overnight, Wall Street had a mixed session. The Dow Jones gained over 200 points, while the S&P 500 gained 0.2 percent. However, the Nasdaq ended lower by 0.5 percent.

What to expect on Dalal Street

The short-term trend on the Nifty 50 remains weak with high volatility, according to Nagaraj Shetti of HDFC Securities. The market is showing lack of strength to sustain the highs, he observed. Shetti expects the index to revisit the recent swing lows of 16,800 in the short-term and any bounce towards 17,100 - 17,150 can be a selling opportunity.

The bearish crossover of the 21-day Exponential Moving Average and the 55-day Exponential Moving Average has further boosted the bearish market sentiment, said Rupak De of LKP Securities. He advises traders to sell every rally and expects fresh selling to resume in case the Nifty 50 reaches 17,250 on the upside. De expects the current weakness to drag the Nifty 50 towards 16,750.

Rohan Patil of SAMCO Securities has observed the formation of a tweezer bottom pattern on Nifty 50's daily chart, which indicates a bullish reversal. However, the index has to close above the high of the pattern for a confirmation. Technically, the trend remains bearish and selling on every rally can be a profitable strategy.

Key Levels To Watch

For tomorrow's weekly and monthly options expiry, the 17,800 strike call of the Nifty 50, along with the 17,000 call added 24 lakh shares each in Open Interest.

The 17,250 call added 17.7 lakh shares in Open Interest, while the 17,050 call added 11 lakh shares.

On the downside, the 17,000 put added 54.6 lakh shares in Open Interest, while the 16,900 put added 14.3 lakh shares.

Nifty 50's put-call ratio is now at 0.85 from 0.78 on Friday.

Both Hindustan Aeronautics and Indiabulls Housing Finance are out of the F&O ban.

FII/DII activity

Short Covering (Increase In Price and Decrease In Open Interest)

Long Unwinding (Decrease In Price and Open Interest)

First Published:Mar 28, 2023 5:46 AM IST