A morning walk down Dalal Street | Nifty needs to hold above 10,300 to witness upmove towards 10,420-10,500

A volatile day for Indian markets both Sensex and Nifty witnessed a recovery in the last one hour of the trading session

After falling for over 1,800 points last week, seeing some green on the screen offers respite

Analysts are attributing the move towards short coverings| Top large-cap names led to swift recovery on D-Street as market breadth was still in favour of declines

Good thing is that crude cooled off slightly which helped OMC stocks in the previous trading session but the rupee still closed above 74/USD

The rupee closed at a new all-time low of 74.07, depreciating 30 paise further against the US dollar. It was the 6th straight session of rupee depreciating against the dollar.

However, the impact of falling crude was not seen on the rupee mainly due to strong dollar index and high US bond yield. The Brent cooled down below $83/bbl levels from the four day’s high of $86.74/bbl.

Technically, the index has to hold above 10,300 to witness up move towards 10,420-10500.

Supports are placed at 10200, 10,000.

The S&P BSE Sensex might have slipped by about 11 percent from its highs but the carnage was visible in the small & mid-cap indices which have dropped more than 20 percent from highs effectively entering bear market phase.

The S&P BSE Small-cap index which hit a high of 20,183 on 15 January and has now plunged by about 32 percent from that level.

The S&P BSE Mid-cap index recorded a high of 18321.37 on 9th January and since then the index has fallen 23.57 percent.

The carnage was fierce in the small-cap space which saw as many as 8 stocks falling by over 90 percent as many as 230 stocks witnessed a decline of 50-90 percent in the same period which includes names like D-Link, Force Motors, Zen Technologies, Jindal Stainless, NBCC, Orient Green etc. among others.

A similar trend was seen in the mid-cap space. The S&P BSE Mid-cap index which plunged by 23 percent from highs was led by losses in Motilal Oswal, Reliance Capital, NBCC, Bank of India, Union Bank of India, Dewan Housing Finance, Reliance Infrastructure, Wockhardt etc. among others.

Technical View:

Technically, Nifty formed a Hammer like candle on charts

Three levels: 10200, 10450, 10500

Max Call OI: 11000, 10800

Max Put OI: 10300, 10000

Technical Recommendations:

We spoke to HDFC Securities and here's what they have to recommend:

Chennai Petro: Sell| LTP: Rs 232 | Target: Rs. 205 | Stop-Loss: Rs 250 | Return 12%

Marico: Buy| LTP: Rs 310 | Target: Rs. 335| Stop-Loss: Rs 294 | Return 8%

Bata India: Buy| LTP: Rs 894 | Target: Rs. 970| Stop-Loss: Rs 844 | Return 8.5%