The Nifty rebounded from its 50-DMA, and closed above important resistance of 100-DMA. From the last four weeks, the Nifty was range bound between 50 and 100-DMA. If the Nifty is able to sustain above the 100-DMA in the upcoming sessions, it will be positive signal for any further momentum. Now, 10,985 will be the key level to watch. If the Nifty closes above 10,985, the market status will be changed to a {Confirmed Uptrend}. 

The advance-decline ratio was in favour of advancers. Of the 2,061 stocks traded on the NSE, 1,081 advanced, 611 declined, and 369 remained unchanged.

Technical view

Sameet Chavan (chief analyst-technical and derivatives, Angel Broking), said: “Global markets were cheerful in the morning and hence, the set up was ideal for us to have a head-start today. Index opened higher in line with SGX Nifty and maintained its position above the 10,800 mark throughout the first half. After a small pause, the buying interest re-emerged during the penultimate hour to eventually conclude the session at the highest point of the day by adding nearly percent and a half to the bulls’ kitty.

“Tuesday was undoubtedly the best day so far of the new calendar year. Firstly, we had a good trended move throughout the day and importantly, we finally broke out from the recent congestion zone in the upward direction. Technically, the ‘Bullish Diamond’ pattern has now been activated and therefore, we expect the fresh leg of the rally to commence now. Unless there is some unfavourable development from the global markets, we expect the Nifty to head towards 10,970 and then to test 11,150. On the flipside, 10,820 followed by 10,777 are now likely to act as strong supports.

Market view

Vinod Nair, head of research, Geojit Financial Services, said: "Market rallied supported by tax cut plan in China and ease in domestic CPI inflation to 2.19 per cent (December). Fall in 10-year yield amid moderation in inflation provide room for RBI to ease monetary policy. Nifty IT outperformed led by revised revenue outlook. FIIs remain in selling mode due to global growth concern which will make investors stay cautious in the market."

—Ashwin Punnen