As the Nifty closes higher, there is some reason to expect that 3050 may have become a short term low. Yet, the risk of a further decline is also high. The Index closed at 3235, just 185 points above the low point of 3050. Given the enormous volatility we have seen, it is possible for the Nifty to fall and close below 3050, in just one day. Traders should keep proper stops for all trades. They should also plan to take profits on any range expansion in their favor.
Having a view on the market helps the trader to plan and execute her trades systematically. One view is to assume that the market may go up to touch 3300 or even 3500 resistance. Traders holding this view should go long on dips, keep a protective stop below 3050. They should also take partial / full profits on any surge in their favor. Traders viewing the rally as a shorting opportunity can sell at current levels with 3300 as a stop loss.
The Nifty is in some kind of a trading range between 3300 and 3050. It is thus possible to have a long or short strategy for traders. I do feel that it is too early to suggest that the bear market is over. Just two days ago, the Nifty made 27 month lows. We need weeks / months of base building before we can call the end of the bear market.