If on Wednesday the market does not break down through the 12 days moving average, one could still consider the bull trend intact. The fact that Tuesday's reaction was too sharp for a single day and that Wednesday marks the beginning of a new NSE week hold the hope that the Sensex might yet manage to stay above the average.

The market opened rather deceptively bright at 3231, some 24 points over the previous close of 3207. It posted an intra-day high of 3235, a gain of just 3 points over the opening. The high was also sharply lower by 31 points than the previous highof 3266. The market stabilised around 3186, but during the last 80 minutes of trading it slid another one per cent to close at 3147.

The day's low was 3126.

The severity of the reaction can be judged from the following figures. The number of scrips in advance went down from 609 on Monday to 408. Those in decline shot up from 502 to 712. The impact on the volumes is even more startling. The advance volume came down from Rs 929 crore to Rs 242 crore! And the volume in decline almost doubled from Rs 552 crore to Rs 1037 crore. It looks as if marketmen were influenced by the holidays ahead during this week; it looked like traders squaring off their positions!

On the daily technical charts, the stochastic indicator has signalled a sell in view of the serious erosion in prices today. However in the weekly chart it is still in positive territory. Today's fall forces one to look at the next support, which comes up at 3083. I would rather reiterate my recommendation of yesterday. Short sellers would stand togain by covering themselves quickly. And despite the short week, going long by making entry at the low level of Tuesday could still prove trade-worthy, even after the badla charges. This recommendation goes beyond the stochastic signal and is meant for making intra day gain.