Any level below 16,836 would be considered a fresh sell signal on the Nifty charts. Below 16,836, the Nifty could slide towards the next support of 200-day EMA, currently placed at 16,612 Vinay Rajani, Senior Technical & Derivative Analyst, HDFC Securities

The Nifty50 has recovered almost 600 points from the recent bottom of 16,836 registered on January 25. During this recovery, the Nifty reached 17,410, which is almost at the 38.2 percent Fibonacci retracement of the entire downswing seen from 18,351 (Top Made on January 18, 2022) to 16,836 (Bottom Made on January 25, 2022).

Primary trend of the Nifty is still bearish, as the Nifty trades below its 50 and 100-day EMA During the pullbacks underlying could show retracement of 38.2 percent, 50 percent and 61.8 percent of the entire downswing. The Nifty has completed 38.2 percent retracement and now the next key resistances are placed at 17,593 and 17,772. The Nifty would be considered in downtrend unless it closes above 17,772.

Indicators and oscillators on the Nifty daily chart still show a bearish trend. Any level below 16,836 would be considered a fresh sell signal on the Nifty charts. Below 16,836, the Nifty could slide towards the next support of 200-day EMA, currently placed at 16,612. Close below 200-day EMA could turn things bad to worse for the Nifty.

However, some of the sectoral indices look much stronger on the charts. PSU Bank, BankNifty and Auto indices are expected to outperform the Nifty with good margin. Though we have seen pullback from the lower levels, we can't call it as a bullish trend reversal for Nifty. Budget Session is going to be very volatile for the markets, we can expect wild swings during the day.