The buy on dips trend remains firmly in place as the Nifty 50 put all the talk of entering a consolidation zone or testing 18,000 levels on the downside to rest on Monday itself.

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Gains made on the first day of the week erased all of Friday's losses, as the index not only crossed Thursday's high, but also closed above Thursday's levels.

Both Sensex and the Nifty 50 registered a five-month closing high on Monday. Most of the index movement over the last few sessions has been confined to a few heavyweights. Monday's surge was led by Reliance Industries, followed by ICICI Bank, the HDFC twins and Bajaj Finance.

Monday's surge also meant that the Nifty 50 has turned positive for the year once again. It needs to remain above 18,197 to stay positive on a year-to-date basis.

A slew of broader market names like Lupin, SRF, Apollo Tyres, Raymond, Godrej Agrovet, among others will be reporting their quarterly results today.

Dealing room sources that CNBC-TV18 spoke to continue to maintain that 18,300 on the upside remains a key resistance level for the Nifty 50 index.

“If there is any alpha at the sectoral level - banking still offers some; where the valuations are early to midcycle still whereas the fundamentals are mid to late," Rahul Singh of Tata Mutual Fund told CNBC-TV18.

"So, there is a bit of a catchup in valuation still left. But it’s an over-owned sector, so there are technical factors which are holding it back. When that reverses, maybe you will get that catchup. The other segment of the market which we have been very bullish on is manufacturing and industrials as a pack which includes capital goods," Singh said.

What do the charts suggest for Dalal Street?

The overall trend is positive as prices are trading above the breakout levels of inverted head and shoulder patterns, said Rohan Patil of SAMCO Securities. Immediate support for the Nifty 50 is seen between 18,050 - 18,000, while upside resistance is now seen at 18,500. A sharp rise in the 18,200 puts indicates that the Nifty 50 is building a strong base for an upmove, Patil said.

Nagaraj Shetti of HDFC Securities believes that a sustained move above levels of 18,300 can take the Nifty 50 index higher towards levels of 18,600 - 18,700. "Any failure to surpass above the hurdle is likely to result in further consolidation with minor weakness," he said. Immediate support is at 18,100 - 18,050.

The Nifty Bank index managed to recover nearly 60 percent of Friday's 1,000-point drop and also reclaimed levels of 43,000 on the upside. Kunal Shah of LKP Securities believes that the immediate hurdle for the index is at 43,500 and crossing that on a closing basis will trigger a sharp short-covering move towards its all-time high levels of 44,151.

Here are key things to know about the market ahead of the trading session on May 09:

SGX Nifty

On Tuesday, Singapore Exchange (SGX) Nifty futures — an early indicator of the Nifty 50 index — fell 50 points or 0.27 percent to 18,300, thereby indicating a subdued start to the trading session.

Global Markets

Benchmark indices in the US began the week on a sombre note, ending little changed. The Dow Jones fell nearly 60 points, while the Nasdaq ended 0.2 percent higher. The S&P 500 closed near the flat line.

Investors are looking forward to key inflation readings, including April's CPI data, which will be reported on Wednesday, May 10.

This will be followed by the Producer Price index data on Thursday, along with the jobless claims data.

What to expect on Dalal Street

Ruchit Jain of 5paisa observed that on Nifty 50's hourly chart, the Relative Strength Index (RSI) isnot making a new high along with the price, which is a sign of divergence. However, the trend remains positive until any reversal is seen and hence he advises traders to move in-line with the trend. 18,200 and 18,120 are immediate supports for the Nifty 50 index, while 18,325 and 18,400 are resistance levels on the upside.

The Nifty 50 index has crossed last week's high and hence the base has shifted from 18,000 to 18,200, noted LKP's Shah. He believes that the index will remain in buy mode as long as it manages to hold on to the support level of 18,200.

Key Levels To Track

For this week's options expiry on May 11, the 18,100 strike call of the Nifty 50 index shed 46 lakh shares in Open Interest, while the 18,200 call shed 45 lakh shares. Shedding was also seen in the 18,150 call of 38.1 lakh shares.

On the upside, the 18,500 call added 28.8 lakh shares in Open Interest.

The 18,200 put added 47.6 lakh shres in Open Interest, followed by the 18,250 put, which added 40.4 lakh shares. The 18,300 and 18,000 put (27 lakh shares each) also saw Open Interest addition.

Nifty 50's put-call ratio is now at 1.1 from 0.85 on Friday.

BHEL has entered the F&O Ban in today's session, joining the likes of GNFC and Manappuram Finance, which continue to remain in the ban period.

FII/DII Activity

Foreign investors continue to remain buyers in the cash market and were joined by domestic investors as well on Monday.

Let us take a look at what Open Interest data is suggesting within specific stocks:

Fresh Longs (Increase In Price and Open Interest)

Fresh Shorts (Decrease In Price and Increase In Open Interest)