The market continued to weaken amidst war tensions and the uncertainties of the proposed switch to a T+3 system. It seems as though there has been a reversal in the intermediate trend and we can now expect several weeks of prices drifting down or perhaps, range-trading. Trading volatility is also likely to rise since volumes appear thinner.
The Sensex ended at 3235.49 points, for a loss of 3.53 per cent. The Nifty was down 3.4 per cent at 1050.85 points. The Defty lost 3.3 per cent as institutional support propped up the rupee. The BSE-500 lost 4.38 per cent showing a negative divergence. The weakness of the overall market was confirmed by lower volumes and poor Advance-Decline ratios.
Assuming that the intermediate trend peaked at 3500 on December 6, we are in the third week of a new downtrend or sideways movement. The break of support at 3270 makes it very likely that the trend has reversed but this can