It wasn't quite the follow up one was looking for after yesterday's stellar rally. The markets suffered intense volatility. The Nifty closed at 4,829 down 49 points, while the Sensex shut shop at 16,087 down 131 points.

Robin Griffiths, Technical Strategist, Cazenove Capital Management, said the Sensex is trying to build a base around 14,600 levels. “After all it has had a decline of 30% from actual peaks and roughly a third down is where you would expect support. Also, the level of 14,000-level was established back last July-August. It is a very strong support, so it would be testing that.”

He expects the current rally to have limited upside right now. “In the next few days, if it goes back down to the level it just rallied from to around 14,600, we will keep seeing buyers getting the upper hand again. We could argue that that would be where the long-term trend for the Sensex is.”

According to Griffiths, for the current rally 17,000 levels on the Sensex is where the upside is limited. “If it were to get about 17,000, I would expect the resistance to be quite great. It is making an overall pattern of falling highs and lows below falling below the 200-day moving average. The 200 DMA is pretty dominant at 17,219 at the moment but there is resistance before we quite get there.”

Dipan Mehta, Member, BSE and NSE, said the markets have a bottom in place. “It seems to have stabilised on the strength of the stability in global markets.”

The results season this time around is the most important ever in the last three-four years, he said.

Mehta feels the top for the Sensex is 17,000. “The markets will stabilize and move sideways for a few more weeks. We may have some volatility as and when there is news flow as and when there is some volatility in global markets. We are settled into a bit of a trading range over here, with the bottom being around 15,000 and the top being around 17,000. So, the Sensex should move within this 2,000-points till we have some solid news coming in from companies as regards to results. This time around we would also like to see how the results of US companies are doing.”

Anil Manghnani of Modern Shares & Stock Brokers said on a weekly closing basis, I am still looking at the 50-week moving average to be crossed and closed above. “For the Nifty it’s not too far away around 4,945-4,950 levels, for the Sensex it is a little higher closer to 16,700. That will be bigger key for me if we can close back above those averages. For the time being, we can assume that the bottom was made at 4,448 and re-tested at 4,468. Right now, I don’t have enough evidence for that but if we can cross above the 50-moving average and can sustain, then may be that can be taken for the fact that double bottom has been made but not yet.”