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The Indian stock market, which had been experiencing a downturn for the past week, witnessed a significant rebound on Tuesday, with the Nifty index closing the day 217 points higher. The market opened on a positive note and continued its upward trajectory throughout most of the trading session. Any dips that occurred were quickly absorbed by buyers, resulting in a strong close at the day's highs. This upward movement, characterized by a long bull candle on the daily chart, suggests that the market may be on the verge of a sustained upswing.
Analysts have observed that Nifty is in the process of forming a double bottom pattern around the 24,700 level. However, this pattern needs further confirmation through additional upward movement to be validated. Despite this positive indication, the previous bullish pattern of higher highs and lows has been negated by Nifty's recent dip below the swing low of the last higher bottom, which occurred on September 9th at 24,753. This negates the bullish trend and suggests that the current upside bounce may be temporary.
The market's rebound on Tuesday could serve as a positive catalyst for bulls to regain momentum. A sustained upward move from this point could confirm a near-term bottom reversal pattern. Notably, a decisive breach of the 25,000 level could potentially open the way for the next upside resistance at 25,400-25,500 in the near term. Conversely, the immediate support level stands at 24,700. Overall, the market is showing signs of potential recovery, but investors need to remain cautious and monitor the market closely for further developments.
Source: Closing Bell: Market breaks the fall; Nifty above 25,000, Sensex up 585 points