Markets were on a smooth course during the last week until a tsunami hit them on Wednesday. Even two trading sessions later what happened on that day remains a mystery.

On that fateful day, markets made new highs with BSESENSEX touching 71,913.07 points while NIFTY touched 21,593.00 points and thereafter just gave way.

They seemed to have a free fall and lost about 2.00 per cent on an intraday basis and about 1.35 per cent for the day. This broke the momentum of the markets and though they gained over the next two days, the optimism for the time being seems to have faded.

BSESENSEX in a week which saw markets gain on three of the five trading sessions lost 376.79 points or 0.53 per cent to close at 71,106.96 points while NIFTY lost 107.25 points or 0.50 per cent to close at 21,349.40 points.

The broader markets saw BSE100, BSE200 and BSE500 lose 0.46 per cent, 0.52 per cent and 0.47 per cent respectively. BSEMIDCAP lost 0.87 per cent while BSESMALLCAP was down 0.19 per cent.

The Indian Rupee lost 14 paisa or 0.17 per cent to close at Rs 83.14 to the US Dollar. Dow Jones gained on two of the five sessions and lost on three sessions. It gained 80.81 points or 0.22 per cent to close at 37,385.97 points.

There were three IPOs which listed during the week. The first to list was Doms Industries Limited which had issued shares at Rs 790. The share closed day one at Rs 1,330.85, a gain of 540.85 or 68.46 per cent. In the next two days, the share lost a tad and closed at Rs 1,305.05, a gain of Rs 515.05 or 65.19 per cent.

The second share to list was India Shelter Finance Corporation Limited which had issued shares at Rs 493. It closed on listing day at Rs 543.50, a gain of 50.50 or 10.24 per cent. It gained marginally to close the week at Rs 550.25, a gain of Rs 57.25 or 11.61 per cent.

The third share to list was Inox India Limited which had issued shares at Rs 660. It closed listing day at Rs 939.90, a gain of Rs 279.90 or 42.40 per cent. It lost some ground to close at Rs 910.35, a gain of Rs 250.35 or 37.93 per cent.

The week ahead begins with a holiday on Monday for Christmas. It is almost a global holiday and most markets are closed. This would be followed by December futures expiring on Thursday the 28th of December.

The current value of Dec ember futures at 21,349.40 points shows that the series gain currently is a massive 1,216.25 points or 6.04 per cent. It’s almost impossible for the bears to fight back. They at best could eat into some of the lead and fight back.

The market has lost its momentum for the time being. The technical indicators too are not in favour of the bulls as FPIs who were at the beginning of the month were net short, have covered them and are long.

Further daily cash market purchases in December have now started to alternate between buying and selling. To add to all of this is the fact that markets are overbought.

In such a scenario it is expected that markets would be in a sideways manner and would alternate between positive and negative, suffice to say that they would move in a sideways manner and remain in a broad range. The intraday highs made on Wednesday would be a resistance for the near term.

The strategy for the week would be to buy into sharp dips and sell on rallies as the ensuing week or weeks would be a trader’s delight with markets moving in a similar broad zone. Trade cautiously.

(Arun Kejriwal is the founder of Kejriwal Research and Investment Services. The views expressed are personal)