The markets surged with volumes higher than the previous session and the market internals favouring the bulls. The benchmark indices gained a little under 2 per cent as the buying commenced after the credit policy was announced. The risk appetite was seen surging with the midcap index outperforming the other indices.

The market internals were positive as the BSE & NSE combined figures were 2487:1264. The capitalisation of the same was also positive as the combined exchange figures were Rs 13730 cr: Rs 3056 cr.

The f&o data for the previous session indicated a 2.3 per cent increase in net long positions amidst a marginal easing of shorts.

The indices have closed at the upper end of the intraday range. The market internals support the bulls for now as the intraday range specified for Tuesday at the 4384/4496 levels was stretched on the upsides, with the bulls clearly having an upper hand in the session.

The daily charts indicate a bullish smash day pattern with the bulls were clearly in command after the intraday pivotal inflection point was overcome on higher volumes.

The short-term outlook is positive as per William s studies as the markets emerge out of a subdued state caused by distressed sales on overseas cues in the recent sessions.

The coming session is likely to witness a range of 4592 on advances and 4465 on declines. Watch the volumes, market breadth and open interest in the coming sessions for signs of immediate trend determination.

The outlook for the markets on Wednesday is likely to be that of optimism as the charts indicate an upthrust in the near term. Bulls are likely to rule the session. Bulls with a medium term outlook may start nibbling in to the high relative strength comparative stocks in staggered lots.