Nifty may witness resistance at 10950
The market snapped the three-day losing streak on Friday following reports that government may soon rollback the plan to levy higher tax on foreign investors.
The Sensex closed 228.23 points, or 0.63 per cent, higher at 36701.16, while NSE Nifty gained 88 points or 0.82 per cent to close at 10829.35.
Among the Sensex pack, 22 stocks ended in the green and 8 in the red. ONGC, M&M, YES Bank, Vedanta and Tata Motors were major gainers, gaining up to 6 per cent.
After showing a sharp weakness in the last few sessions, the Nifty witnessed a smart comeback from the lows on Friday and closed the day higher. A long bull candle was formed on Friday after opening lower.
The rebound happened following the statement by FM that changed the sentiment dramatically, and helped major indices close higher. "Based on price pattern, markets have reached lowest levels and chances of pulling partial losses are bright. We could expect 11100 on the minimum side. Bank Nifty is most sensitive index to the news flow on the FPI front that should do well on Monday," Shrikant Chouhan, Head Technical Research, Kotak Securities said.
According to analysts, technically, this candle pattern indicates a formation of 'bullish piercing line' type pattern. This formation could be considered as a near term bottom reversal in the Nifty, post confirmation of the next session. a positive divergence pattern is seen in the Nifty, which signals that the upside momentum is gradually strengthening in the market.
"The near term trend of the Nifty is positive one may expect further upside in the next session. Immediate resistance to be watched around 10,950 -11,000 levels," said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
In addition, to the expected withdrawal of surcharge on capital gain for domestic and FPIs, the incremental announcements will be taken positively by the markets.
"The market reversed from six months low in expectation of supportive policies from the government. Change in scrappage policy to revive auto demand and roll back surcharges on FPIs can change the current sentiment of the market,' said Vinod Nair, Head of Research, Geojit Financial Services.