Only 10 days ago, there was this looming threat of the stock markets going below their October lows. Last week, not only did the markets shrug off the threat, the NSE Nifty and the BSE Sensex rose by about 4% and 5% each respectively. Monday was a day of upside too — both indices ended in green. With the three-day upside under their kitty, the markets are now comfortably perched above their October lows. So with the continuous positive closing for three days — March 12, 13 and 16 — do the markets send out signals of a turnaround? Is it time yet to call it something more than a bear market rally?

Tomorrow crucial: Sukhani

Sudarshan Sukhani of Technical Trends said a four-day continuous rally is the best that is seen even in bull markets and thus tomorrow’s movement would be crucial to watch out for. Sukhani, however, added that it would be prudent for short-term traders to take their profits home as the Nifty was sitting at its resistance levels. “2,800–2,850 is a significant band of resistance,” he said, adding, “So, the answer would be this is a short-term uptrend, take your money home. If this is the real thing, we will have a lot of opportunities of dips, and much more signals to come.”

‘More than a bear market rally’

Samir Arora of Helios Capital said the current bounceback was more substantial than a bear market rally. The markets, he said, were leading the trend compared to corporate results globally and added the news events like Bank of America reporting it will USD 50 billion of pre-provisioning, pre-tax profits and crossing market cap of USD 38 billion were positive for the markets. “In general, it (the rally) can have more legs even if it too early to say if it is a bigger bull or not,” he said. “However, it will be meaningful in itself and therefore we have to take it one step at a time and in that sense, this rally will be longer than just a day or two.”

source: Moneycontrol

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