There is massive unwinding happened between 16,000 and 16,200 Call writers yesterday. The 16,500 Call writers is still standing firm and that is the key to watch.

The level to watch today would be 16,660. If one starts to trade above that and even for an hour, one trades above that, one will see more short covering.

The call yesterday was that in the bear market as well, the rallies are powerful, short squeezes are powerful and they look like the real deal, which is what happened yesterday.

Also Read:

Trade setup for March 10: Can Nifty50 touch 16,500 soon? From key market cues to technical signals to important levels to track

Now will the market see a test of 20-day moving average (DMA) of 16,850? Market is still oversold and the Bank Nifty is extremely oversold, so the Bank Nifty can easily have some more rally today – another 1,000-1,500 points is easily possible on the Bank Nifty but do you chase it? That is the big question.

Watch the accompanying video of CNBC-TV18’s Anuj Singhal for more details.

Catch all stock market updates here