Headline index Nifty50 ended a percent higher amid mixed global cues, making a long bullish candle on the daily chart.
The index opened flat and remained subdued in the first half of the trade. However, bargain hunting in the second half lifted the index higher even as global cues were mixed.
The Nifty50 ended at 17,315.50, up 198 points, or 1.16 percent while the 30-share pack Sensex closed 697 points, or 1.22 percent, higher at 57,989.30.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities, pointed out despite the recovery, uncertainty in the market is likely to prevail and investors will continue to brace for more sharp gyrations in the next few sessions.
The rising US bond yield and uptick in crude oil prices can unsettle the markets going ahead and investors need to be really careful about this before taking a major exposure.
"Technically, the index took the support near the 200-day simple moving average (SMA) or 17,000 and reversed quickly. It also formed a long bullish candle on daily charts which is broadly positive. For the trend following traders, now the 50-day SMA or 17,200 would act as a trend decider level. Above the same, the uptrend wave will continue till 17,380-17,435, while below 17,200, the uptrend would be vulnerable," said Chouhan.
Analysts believe the level of 17,000 is critical support for Nifty and the index now aims to clear the next hurdle at 17,350.
"Bulls made a smart recovery from the intraday lows of 17,000 by respecting the strong near-term support levels. Post this price behaviour, it can be easy for the bulls to get past the hurdle present around 17,350 levels in the next trading session," said Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in.
"On such a close, eventually Nifty can expand its strength towards 17,900 levels. However, in today’s session, the advance-decline ratio slightly favoured bears. Hence, the inability of bulls to get past 17,350 should result in sideways consolidation between 17,350 – 17,000 levels. On the downsides, 200-days moving average, present around 17,000, shall continue to remain as critical support. Therefore short-term traders are advised to buy either above 17,360 or on a dip," said Mohammad.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.