The market continued to trade in a tight range with support and resistance almost balanced. Tech stocks continued to experience selling pressure, while old economy stocks were more buoyant. In nominal terms, the indices saw small gains.
The Sensex closed at 3377.05 with a marginal gain of 0.42 per cent. The Nifty closed similarly at 1093.15, with a gain of 0.43 per cent. The BSE-500 saw a gain of 1.78 per cent while the Defty outperformed the Nifty with a 0.57 percent gain as the rupee recovered from record lows. Breadth was reasonable and volumes also recovered in the last two trading sessions.
The Sensex has now traded above its benchmark 200-day moving average for the last fortnight. This could be a confirmatory signal of a serious change in the long-term trend, because such a period also occurred in early December 2001. The MA signal reinforces the Fibonacci Timezone analysis, which suggests that the long-term trend may change in late January.
In trading terms, the support along the 200 DMA is kicking in at around just above 3300 and we could read this as the bottom end of the current trading range. On the upside, there is a big resistance in the 3450