The market opened with the Sensex at 3239, some six points lower than the previous close of 3245. The opening was also lower than the previous low of 3240. The intra-day low dipped to 3184, a sharp drop of 56 points over the previous low. However, the index closed on a firm note at 3273 posting a gain of 28 points, day-over-day.

In terms of Japanese candle terminology, the index has formed a piercing pattern. It started lower than low and ended up higher than the previous high. This is considered to be bullish. The daily stochastic indicator is comparatively a more cautious one. While acknowledging the rise, it would need one more day of sustained level, before it would confirm the upmove. It is in a wait and watch mode. But beyond these two indicators, the price patternindicates the potential for a quick snap back to 3426 levels. Aggressive players can take risks for a quick gain.

In fact the 3184 level at which the index reversed happens to be another important support level in cluster formation. That the market should rebound at this point indicates that much technical buying has been done!

That being the case the snap back to 3426 has a much higher probability. But beyond these technical readings, the market is obviously being driven by a reading of the political developments regarding the election schedule. The market appears to be expecting an early poll. If this perception gains confirmation, the speculative momentum will gather speed.

The Sensex has gained support from a wide front. The support in HPCL, Hindalco, MTNL, ICICI,IDBI, Reliance, SBI and Gujarat Ambuja, all qualify as value based pick ups at attractively low prices. But while bottom fishing is understandable, it is difficult to say if speculative support will follow to take it to higher levels.Should early elections get indicated, speculation would certainly start snowballing.