The sharp move upwards towards the end of the day shows a momentum that should favour the bulls, if international market sentiments remain positive

The Sensex has been struggling for the past three days in a tight 150-point range of 17,030 and 17,180. It has finally broken out of this range and hit a high of 17,215 towards the end of the session, although the adjusted closing level was 17,168 points. The index closed up by 69.63 points. This is the highest close since the Budget. More importantly, it is the highest close for the Sensex since 20th January. It was on 21st January that the Sensex had crashed by about 400 points— the first day of a sharp decline of 2,000 points over the subsequent two weeks.

The sharp move upwards towards the end of the day shows a momentum that should favour the bulls. This is provided we don’t see a sharp reversal in overseas markets. If the momentum continues, we are likely to hit 17,400. A continued advance after this would be hard. The market will give up a lot of its recent gains. The index is effectively rallying from an intraday low of 15,652 on 8th February. It is already up by almost 1,500 points.

If the Sensex reaches 17,400, it would be time for a reversal which may take the index all the way down to 16,800-16,600.

During the day, Asia’s key benchmark indices in Singapore, Hong Kong, China, Japan and Indonesia were mostly flat. On Wednesday, 10th March, US markets were up. At the time of writing, European markets were trading lower and US futures were in the negative. Foreign institutional investors have continued to pour money into India. Yesterday they had put in a net Rs418 crore. In the current month, net flows have been positive on every single day of trading.