Is today's market surge sustainable or is it a dead cat bounce? Analysts suggest levels to confirm trend reversal

Stock market today news: Sensex, Nifty rise in trade.

• Sensex jumped 938.93 points, closing at 75,502.85.
• Nifty rebounded above 23,300 after early losses.
• Market sentiment cautious due to high oil prices and tensions.

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The domestic equity markets began the week on a volatile note and settled over 1 percent higher on Monday, snapping a recent losing streak on the back of bargain buying.

The Nifty opened flat after the steep correction seen in the previous three sessions and slipped in early trade. However, buying in select heavyweight stocks across sectors triggered a sharp rebound in the latter half of the session. The benchmark index eventually settled at 23,408.80 level.

The Sensex jumped 938.93 points or 1.26 percent to close at 75,502.85. During the day, the index touched a high of 75,805.27.

Market participants said the rebound largely reflected investors accumulating stocks at lower levels following the sharp decline in recent sessions.

However, the overall sentiment remained cautious amid continuing geopolitical tensions in West Asia and elevated crude oil prices, which have raised concerns over inflation and India’s import bill.

Ajit Mishra, SVP – Research at Religare Broking, said the rebound helped the Nifty move back above the 23,300 mark after testing sub-23,000 levels during the day.

"However, participants should not read too much into a single-day bounce and should wait for sustainability of the move, as the index continues to trade below key resistance zones," he said.

According to Mishra, the 23,600–23,900 band is likely to act as an immediate hurdle, while the 22,900–23,000 zone will remain an important support area on the downside.

Om Mehra, Technical Research Analyst at SAMCO Securities, said the 23,700 level remains a crucial resistance.

"A sustained move above this zone will be required for a stronger recovery. Until then, the current move appears to be a short-term relief rally rather than a trend reversal," he added.

Rupak De, Senior Technical Analyst at LKP Securities, said the Nifty witnessed a recovery as the index did not sustain below the 23,000 level and quickly moved back above it.

"On the daily chart, the index has formed a piercing line pattern, which is a bullish reversal signal after a prolonged correction. Although the broader sentiment has not changed significantly, a near-term technical pullback cannot be ruled out," he said.

De added that the index may see a recovery towards the 23,800 level or higher. Immediate support is placed at 23,200 and a break below this level could lead to renewed weakness.

Meanwhile, Brent crude, the global oil benchmark, rose 1.41 percent to USD 104.4 per barrel.

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