The Indian stocks will likely see another bout of fresh selling Tuesday, on weak cues from US markets, oil rising to $129 per barrel and with GX Nifty settling at 43 points discount. Adding to the weak sentiment will be the fall in Asian markets today.

Investors could find some comfort in the fact that though foreign institutional investors sold index futures, they were net buyers in stocks futures and in options Monday.

The Nifty breached the previous low of 4801.90 and closed well below that level. In daily charts, a long black candle has formed. The Stochastic once again turned down and generated fresh sell signals in the over sold zone. The RSI is also in sell mode. All this suggests a downfall, but the scale may be lesser.

Indian stocks plunged Monday on heavy selling across the counters. Investors pressed sales on weak cues from European markets, talk of political instability at the Centre over the fuel price issue, and foreign fund managers turning sceptical about the India growth story.

The selloff pulled down the Nifty intraday to 4713, its lowest level since April 15. There was no evidence of short covering or value buying and Nifty closed at 4739.60, after losing 2.7 per cent during the day.

Nifty June futures closed at 20 points discount to the spot. The volume was almost the same as that in the previous session. Significant build up was observed in Nifty calls of 4800 and 5000, while positions got built in put of strikes 4700 and 4600. This indicates an immediate resistance at 4700 level.

"Nifty is expected to open flat in normal circumstances. One can expect a good amount of recovery towards the closing after a fall to 4690-4700 levels. In a worst case scenario, the Nifty might test the long-term support levels of 4620-4650," said Suresh Kumar Iyer, an analyst with Asit C. Mehta.

Monday, foreign funds were net sellers of Rs 924 crore in index futures, while they net bought stock futures worth Rs 400 crore and aggregate options worth Rs 776 crore.