Trade setup for March 4: Can Nifty50 hold key support at 16,400? Check out market cues, levels to track, technical signals

The Nifty50 has formed a long bearish candle on the daily chart, suggesting weakness on Friday, according to Sachin Gupta, AVP-Research at Choice Broking.

"It has been trading below its 50-day simple moving average on the hourly chart... MACD has suggested a negative crossover," he said. MACD is a momentum indicator.

Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities, is of the view that selling intensity has been decreasing for the past few days.

"Key support for the 50-scrip index is again emerging at 16,450-16,400 levels. In the last downtrend, the Nifty found strong support at 16,400 -- a level of great relevance, which propelled it to 18,350. As long as it stays above 16,400, we can see volatility between 16,800 and 16,400. A close below it will be negative for the market," he said.

At 7:36 am on Friday, Singapore Exchange (SGX) Nifty futures -- an early indicator of the Nifty index -- were down 310.5 points or 1.9 percent at 16,201, suggesting a gap-down opening ahead on Dalal Street.

Equities in other Asian markets suffered deep losses in early hours amid rising oil prices following a report that a Ukranian nuclear power plant was on fire. MSCI's broadest index of Asia Pacific shares outside Japan was down 1.5 percent at the last count.

Japan's Nikkei 225 was down two percent, China's Shanghai Composite 0.9 percent and Hong Kong's Hang Seng 2.6 percent. South Korea's KOSPI was down 1.1 percent and Singapore's Straits Times 0.4 percent.

S&P 500 futures were down half a percent. On Thursday, the three main Wall Street indices fell 0.3-1.6 percent amid weakness in growth stocks such as Tesla and Amazon.

Ruchit Jain, Lead Research at 5paisa.com, expects the momentum to remain weak till the Nifty takes out the 16,700-16,800 hurdle, and suggests avoiding aggressive positions for now.

"Till the trend remains down, the banking and financial space is likely to continue its underperformance. Traders should wait for a move above 16,800 with broader market participation," he said.

Gupta of Choice Broking has identified the following levels:

Exchange data shows the maximum call open interest is accumulated at the strikes of 17,500 and 17,000, with 1.1 lakh contracts each. On the other hand, the maximum put open interest is at 16,000, with 1.1 lakh contracts, and then 16,500, with almost 97,000 contracts.

This suggests the Nifty faces a major hurdle at 17,000, and meaningful support after 16,500 comes only at 16,000.

Five stocks in the BSE 500 universe managed to scale 52-week highs: Vedanta, Nalco, Adani Transmission, GNFC and Hitachi Energy.

As many as nine stocks in the broadest basket on the bourse hit 52-week lows: Dr Reddy's, Hindustan Unilever, Shree Cement, Aarti Drugs, AIA Engineering, Endurance Technologies, Kansai Nerolac, Ramco Cements and Strides Pharma.

The India VIX -- also known as the fear index -- eased 3.7 percent to settle at 28.2 on Thursday. Last week, Russia's move to invade Ukraine had sent the index soaring to a 20-month high of 34.