The global setup is looking positive. The S&P500 ended about 2 percent higher, and the NASDAQ is about 2.7 percent higher.

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There are reasons to believe that the market could be finally getting that bounce - maybe it's a bear market bounce in the US. Many have been waiting for it.

Data has been weaker. Services Purchasing Managers' Index (PMI), the gross domestic product (GDP) numbers, the revisions, so weaker data is reducing Federal Open Market Committee (FOMC) front-end expectations. That is point number one. Holiday market conditions - Monday is a holiday. So going into that activity kind of thins out and this rally to be sure overnight has happened on low volumes as well. Month-end demand – month-end is on Tuesday. But the point is Monday is a market holiday. So people correcting their underexposure to equities and there are lots of funds who do this maintain their weightage across asset classes and with the selloff in equities that would have gone down so they've got to get more exposure to equity. So month-end rebalancing would take place between last night and today later today as well.

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The 5-year, the 10-year flat, oil prices are back up about 3 percent or so at $117 per barrel. The point is the next target - lots of trading on oil happens purely based on technical charts - clearly is $123-124 per barrel odd levels. So oil is going up and this is not good news for a large importer like India, at the margin.

On the S&P500, the S&P E-Mini Futures contract is breaking the former ascending support, which was now the resistance at 4,002. A close above this level, basically will mean the next stop is 4,095, which is the 17th of May high and then beyond that, it opens up the potential for that index to move up to about 4,303.

Watch the accompanying video of CNBC-TV18’s Prashant Nair for more details.

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