Traded volumes were steady and the market breadth was highly positive as the bullish frenzy saw bottom fishing by stronger hands.
The initial shock of the terror attacks was absorbed rapidly as I had pointed out yesterday and all of the index heavyweights witnessed huge spurts and buying support.
The fact that the indices have closed near their days highs is a sign of bullishness at the fundamental level.
The Sensex and the Nifty have closed at their threshold levels of 4150 and 1318, respectively.
It is important that these levels not be violated downwards in the coming days - especially on a closing basis.
That will propel markets higher in the short term. Since the panic bottoms on the NSE and the BSE were at 1246 and 3944, respectively, I expect these supports to be the immediate bottoms below which the indices should not fall.
On the upside, expect the 1390 and 4257 to be next resistance levels.
The outlook for Wednesday is of optimism as follow-up buying support is likely to emerge at lower levels.
Derivatives expiry will be the single largest trigger for the markets. Among stocks, Reliance was advocated as a market leader and has lived up to it
