The Sensex leap frogged to 3691 on Wednesday, but closed lower at 3648. The tempering of the index started 45 minutes before the end of the session. The bull run of the Sensex has had a strong momentum. It can be said to have some more upside potential. This is because the RSI indicator is now at 73.66. Comparatively, in the earlier bull run the indicator at the peak on January 11 was higher at 81.23.

Never the less, the index has closed just a point above the opening. The BSE 100 & BSE 200 are exhibiting `Black Open Shaven Heads', which are bearish indicators. Even the S&P Nifty is bearish. It opened at 1066, went up to a high of 1073, dipped to a low of 1052, and closed at the lower end at 1052.

The market breadth data indicates that at the BSE the number of scrips in advance went up from 890 to 951; however,volume in advance went down from Rs 1963 crore to Rs 1855 crore. The number in decline went up from 640 to 774. The volume in decline went up from Rs 170 crore to Rs 393 crore.

Wednesday being the first day of the trading week at NSE the number of scrips in advance shot up from 573 to 774, and that in decline went down from 581 to 329. The volume in advance went up from Rs 2274 crore to Rs 2362 crore.

The RSI indicator for the S&P Nifty is at 70.71 compared with the January peak of 79.71. This should indicate that there is some more upside potential. On the other hand, you need to note that the index has closed distinctly on the lower side for the day.

Bajaj Auto has launched itself into a new orbit, after breaking a resistance at Rs 544. ICICI and IDBI are now taking off. ITC, NIIT, Ranbaxy and HLL are essaying into new areas. In conclusion, the first signs of reaction are surfacing.