Despite breaking the specified support level of 4,600 and touching a low of 4,448, the Nifty closed at 4899. The close above the 200 days moving average of 4,888 is a positive.

According to Kamalesh Langote of vfmdirect.com, the markets have a trend-line support at 4,600 and are trading well above the 200 days simple moving average levels.

The candlestick pattern formed on Tuesday is decidedly bullish.  The markets are in an oversold zone as the five days relative strength index is at three and 14 days RSI at 17.

The market wide open interest declined by 15 per cent and is 25-30 per cent below the peak levels, indicating covering of long positions. The Nifty futures OI declined further by 19.5 per cent or 74.45 lakh shares. The current Nifty January OI of 30.97 million shares is the lowest for the current month series.

The Nifty PCR was 0.93, down from 0.97 on Monday. The Call options shed 3.55 lakh shares and Put options shed 9.29 lakh shares in open interest. The advance decline ratio continued to be weak at 150:2268 for BSE traded stocks and 61:1085 for the NSE stocks.

The markets extended their losses for the seventh consecutive day on the back of a sharp fall in the global markets, selling by FIIs and margin calls. The 75 basis points cut in interest rates by Fed is expected to lend support to the markets.