The market opened on an optimistic note at 3169 with a gain of 7 points over the previous close. The day's high at 3186 again affirmed the positive outlook as it was a gain of 10 points over the previous high of 3176. The profit booking mood caught more force after 1.30 P.M. and the Sensex, after putting up some resistance at 3140, went down to a low of 3132, which was a loss of 20 points over the previous low of 3152. At close the Sensex lost 23 points day over day to close at 3139.

Many scrips have now come under the spell of profit taking. But talking of the Sensex as a whole, it is still above the 7 day's exponential moving average, which is at 3111. The 12 day's moving average is at 3076.

Interestingly, the index is well above the 40 days moving average which is at 3076. The fact that the index has movedabove this average is a signal for investing for long term investors.

For the short term traders, the daily stochastics is at 82.76 above the trigger line which is at 80.32. The RSI too is still in positive territory. It now remains to be seen as to how far the profit booking can take many pivotals down. Sensex could now resist the fall at either 3110 or 3083. It is also possible that the index would try to travel in an horizontal path. It is difficult just now to forecast if the reaction would take the Sensex down deeper than said above. That remains to be seen on the trading floor. But with the absence of any negative developments to marr the mood, you should keep yourself open to the possibility of profit taking being just that; not converting itself into a bear attack. In any case with the buoyancy that has been seen in the past two weeks, investors might as well use the opportunity of the current reaction to take their picks for long term investment.