The bears were back in action on Monday, setting the stage for a further downside. Technical indicators suggest bearishness, with a break in trend line on the price charts and relative strength index (RSI) declining below the 50 mark to 38.The markets tested the short term target of 17,000/4,900 and both Sensex and Nifty closed below the 200 days simple and exponential moving averages at 16,677 and 4,953 respectively. The bearishness gripping the US markets could gradually drag the indices back home closer to 16,000/4650.The gap-down opening kept traders away from the derivatives scene. The F&O turnover dipped by Rs 13,000 crore to Rs 36,591 crore, indicating the total absence of day traders.Among the 225 stocks futures, only 12 ended with marginal gains. Over 50 per cent of the futures closed at a discount, which shows all-pervasive weakness.The Nifty March futures contracts traded at a discount of 50 points during most of the session, compared with 41 points on Friday. The discount widened further to 60 points at close.The open interest, though, rose by 29.19 lakh shares to 4.44 crore shares. This indicates that bears were willing to pay an annualized carry-forward charge of 14.3 per cent to carry their shorts.The Nifty PCR declined further to 1.15 from 1.29 on Friday. Based on the increase in Put open interest, the Nifty has a support at 4,600, 4,800 and 4,900 levels. Resistance is seen at 5,000, 5,100 and 5,200.
