Key equity indices the Sensex and the Nifty gained almost 2 percent buoyed by positive global cues after some signs of an end of the war between Russia and Ukraine emerged.
Supportive global cues led to the gap-up opening, however, caution ahead of the US Fed meeting outcome capped the movement as the day progressed.
Sensex closed with strong gains of 1,040 points, or 1.86 percent, at 56,816.65 while the Nifty settled 312 points, or 1.87 percent, higher at 16,975.35.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities underscored while the conflict between Russia and Ukraine continues, other events such as cooling oil prices and US Federal Reserve's decision on the rate front and commentary about the pace of future rate hikes are being eyed by the investors.
The trend reversal in recent sessions is also due to the fact that the market has been in oversold territory in the past few weeks.
"Technically, on intraday charts, the Nifty maintains a higher high and higher low formation and now is heading towards 17,000 and 17,200. We are of the view that the current texture is likely to continue unless the index slips below 16,750-16,700 levels," said Chouhan.
"Above this level, the Nifty could rise up to 17,100-17,200 levels. Traders may prefer to take a cautious stance if the index slips below 16,750 and below the same, chances of hitting 16,700-16,600 would be higher," he added.
Even though Nifty recouped all the losses of the last trading session, it is still below the 200-day moving average. Moreover, the intraday trading range remained 150 points. Hence, strength in Nifty shall not be expected unless it closes above 17,000, Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in, pointed out.
If Nifty slips below 16,837 then on the intraday basis, it can attract some selling pressure. Nevertheless, the last three sessions of price behaviour is hinting that 16,600 can assume the role of critical support in the near term, Mohammad said.
He believes dips can remain a buying opportunity unless Nifty closes below 16,600 levels. "In case Nifty registers a close above 17,000, an initial target should be in the zone of 17,450–17,550. For momentum traders, the best buying opportunity shall arise with a close above 17,000," he said.
Markets will first react to the US Fed meeting outcome in early trade on March 17. Besides global updates, the scheduled weekly expiry would further add to the volatility.
"We recommend booking some profits on the rise, citing immediate hurdles around the 17,150 zone and focusing on identifying opportunities in sectors that are trading in sync with the benchmark," said Ajit Mishra, VP - Research, Religare Broking.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
