Technical Analyst, Vijay Bhambwani:

The anticipated pullback rally did occur and was accompanied by short covering at lower levels. The charge was led by the midcap and banking stocks, with the technology pack bringing up the rear. The traded volumes were mildly higher as compared to the previous session, which is a positive indicator for an uptick session as retail participation revived marginally. The market breadth was positive as the BSE & NSE combined advance decline ratio was 3025 : 769. The capitalisation of the breadth was positive as the BSE & NSE combined figures were Rs 18878 Crs : Rs 948 Crs. The NSE gained Rs 147683 Crs in market capitalisation.
 
The indices have closed in the upper end of the intraday range, with positive market internals and marginally higher volumes. These are indications of some bear covering coupled by fresh buying at lower levels. The intraday range specified for Tuesday between the 4055 / 3890 was overcome on the upsides as the Nifty closed above the specified resistance.

The coming session is likely to witness a range of 4225 on advances. Support is likely at 4025 on declines. The wide range is due to the high base effect of Tuesday's session. The bullish pivot for the session will be at the 4065 and the bearish pivot at the 4030 levels. Traders need to watch the activity beyond these thresholds respectively for intraday guidance.

The market internals indicate a higher turnover due to the strength. The number of trades were higher and the average ticket size per trade was higher, indicating a revival in the buying bias. The capitalisation of the market was higher in line with an uptick session.

The outlook for the markets today is that of continued optimism as the bears are on the defensive and overseas cues are positive. The upthrust maybe calibrated unless follow up buying is sizable. Traded volumes will play a large role in the immediate future.

Disclosure: Tthe analyst has no exposure to the scrips recommended above.