S&P CNX Nifty (5,998.90): The Nifty is still trading within the confines of the bullish and bearish trigger levels of 6,150 and 5,940 respectively. The index drifted lower in the trading week ended 1 February, and closed below the psychological support of 6,000. Taking into account the recent price action, there is enough reason to tread with caution.

As highlighted in the daily chart of the Nifty above, the index is at a crucial resistance level. The rally from the 20 November low of 5,548 has been almost unidirectional and devoid of any significant correction. In the recent leg of the uptrend, the price swings has gotten smaller and the loss of momentum is evident.

That the loss of momentum is happening at a juncture where the index is at a crucial resistance level is a worrying factor. As highlighted in the prior weeks, a fall below 5,940 would not only be the tipping point but would also act as a licence to hunt for short positions.

Those holding long positions may tighten their stop-loss, closer to the recent action, in order to protect unrealised gains. Index heavyweights such as Tata Motors, Hindustan Unilever, Jaiprakash Associates and Bharti Airtel come across as weak links and could push the Nifty to lower levels.

CNX Bank Index (12,606.25): That this index has a big influence on the Nifty is common knowledge. There has been disparate set of moves amongst banking stocks. While select public sector banks have a relatively positive technical set-up, the majority of private sector banks and a few from the public sector have a bearish undertone.

Similar to the Nifty, the bank index is still holding ground above the bearish trigger level of 12,250. The major support for the bank index is in the 11,850-11,900 range. Unless the index resumes its uptrend soon, there would be a strong case for a test of this support zone.