The monthly derivatives contract would expire on Thursday followed by announcement of GDP data for the second quarter on Friday.
The movement of the rupee, which has been under pressure in the last few days, and action of foreign institutional investors (FIIs), who seem to have turned cautious last week, would be the main drivers this week.
Besides, hints by the US Federal Reserve on timing of the stimulus tapering would also affect the market.
Key levels for this week will be 19,910 and 20,625 on the Sensex and 5,915 and 6,145 on the Nifty.
Markets rallied on the first two days and lost on the next two while remaining flat on the fifth day. Markets tested important levels when the Sensex turned just before the low of November 13 while the Nifty took support at the same level. This technical set-up could trigger a rally. The October series futures had expired at 6,164.35 points. The current market is lower by 169 points, or 2.74 per cent.
The bulls are having an upper hand and unlikely to give way so easily. This week will be volatile with sharp intra-day moves but an upward bias.
Investment by FIIs in the last three trading days of the last week was virtually flat. This could be attributed to them turning cautious post the Federal Open Market Committee meeting, minutes of which indicate that tapering may happen earlier than expected. FIIs were net buyers of equity worth Rs 1,924 crore while domestic institutions were net sellers of Rs 813 crore.
The special window for foreign currency non-resident deposits opened by the Reserve Bank of India will close on November 30. It has has attracted remittance of $22.7 billion so far.
Dow Jones continued to rally and closed at 16,064 points, a gain of 103 points, or 0.64 per cent. Gold prices have been falling internationally and closed at $1,243 an ounce, quite close to the low made in June, $1,211.
In India, the price of gold is Rs 31,000 - courtesy the periodical import duty, which has been levied, and the depreciating rupee, which has fallen from 55-56 to 63.
National Hydroelectric Power Corporation (NHPC) will buy back up to 10 per cent of fully paid-up equity capital, which works out to 123 crore equity shares at Rs 19.25 apiece payable in cash, for an aggregate amount of Rs 2,367.89 crore through tender offer.
These shares were issued at Rs 36 in August 2009.