The indices ended the day with almost 1.5 per cent gains. Traded volumes were marginally lower than the previous session though above their 10-day average.
The market breadth was slightly negative as the undertone was one of uncertainty.
The capitalisation of the breadth was highly positive as the index heavyweights received buying support from institutional investors.
The indices have taken support at their short-term triggers and that is a sign of a confirmed bull market correction.
Typically, this correction is likely to be short and accompanied by higher volatility.
The fact that the Nifty has failed to close below the 1520 levels, as I had specified earlier, makes that level a good short-term support.
On the higher side, expect resistance at 1563 levels, which was the immediate top made by the index.
Should the Nifty surpass that level on a closing basis, expect a fresh upmove up to the 1592 & 1615 levels.
The F&O figures are very enthusiastic as the gross long positions in the markets have actually risen in the last two sessions in spite of the volatility and correction in prices.
That shows that the broader expectation is that of buying opportunities on all declines.
With a broader buying support, a significant fall in prices is unlikely in the absolute short term.
The outlook for Thursday is of optimism as the buying support is likely to be extended across the board.
Among stocks, Reliance has the potential to lead the markets from the front and has shown good relative strength on the charts today.
Buying is recommended in small quantities as the company announces it
