Relief rally to continue; Nifty resistance seen at 2850-3000

"I feel the bottom has been formed at 2500 on Nifty and 8300 on the Sensex. The pullback rally which began Friday is expected to continue for a few more days, but of course, subject to global market conditions. However, I do not see any more downside below 2500 on the Nifty at least in the near term. An upside in the range of 2850-3000 is likely next week," said Hitesh Sheth, head of technical research at Prabhudas Lilladher. Traders cited talk that the Federal Reserve could cut interest rates in an emergency move later in the day or global central banks could conduct another round of joint interest rate cuts in the face of renewed market volatility. "What the market witnessed on Friday was more of a short covering rally in anticipation of a rate cut by the Federal Reserve. Given that the forthcoming week is the F&O expiry week, we can expect some more short covering or short rollovers to continue. So to that extent, we can see some stability in the market next week," said Anita Gandhi, head-institutional business at Arihant Capital. "Given the oversold condition that the markets are in at this point of time, the relief rally which started Friday is expected to continue, especially in frontline index based stocks and F&O stocks," said independent technical analyst Hemen Kapadia. "Our markets are currently faced with multiple worries - FII selling, domestic short selling, besides global market weakness. The market will take technical correction after sometime having entered the oversold zone. Grab this opportunity for making some money. I believe market will offer good moves to smart traders before November F&O expiry," added Kapadia. Indian shares have fallen 56 percent so far in 2008, making it one of the worst performing Asian markets, hurt by massive foreign fund outflows amid the deepest global financial crisis in 80 years that has savaged equity markets across the world.