The low for the day at 4,684 was 90 points higher than the previous low of 4594. The Sensex closed at 4717 posting a gain of 77 points over 4640. The market breadth data indicates that the rally has now spread to more scrips. The number of advances moved up sharply from 592 to 953. The advance volume moved up from Rs 1544 crore to Rs 1902 crore. The number of declines went down from 1116 to 672, with decline volumes contracting from Rs 700 crore to Rs 386 crore.

The daily stochastic indicator for the Sensex has cut through its trigger line in the overbought zone. While that is a bearish signal,quite often the reaction can pull the index back only marginally, before the index resumes its upward march. Nevertheless, traders need to be cautious, as the price fatigue has become visible in several of the Sensex scrip. The bearish trend could deepen in these counters, especially considering that Tuesday is the last day for the NSE week. Those in good profit may as well take them and log in lower thereafter.

If the Sensex falls through 4630, you should consider that to be rather a stamp of weakness. That event could reinforce bears, and make them bold. The RSI indicator is intact and does not signal a sell, even though it is in overbought zone. The index could well settle down to a sideways movement, before resuming its journey upwards again.