The thin range in the indices continued on Wednesday. While profit booking was observed across the board, technology stocks helped the markets to close with minor losses. The sensex lost 0.20% while the nifty lost 0.23%. Market breadth was inclined towards the losers on both the exchanges while the volumes were slightly lower.

Things have not changed much since the beginning of this week. The sensex dropped down after touching the peak of 3499 to a low of 3414. Ever since then, a narrow sideways move between 3400 to 3460 has been going on. Going by traditional trend following methods, the short-term trend is down and will turn up only after the sensex rises above 3500 again.

If this downward move is only a minor correction then it should not fall below 3350 in the sensex and 1090 in the nifty. As long as the indices stay above these levels and their respective 200-day Ema's, the traders can continue to be long. The factor to be borne in mind is that this could be a distribution phase before a downward breakout.

The markets in the US too seem undecided. But the indices there are staying pegged at the top in spite of the loss of momentum. It is wait and watch time worldwide. Or is everyone busy holidaying?

TODAY'S TRADING DAY

Another minor rally in the morning can take the sensex up to 3427, 3441 and then 3462. Failure to cross above 3460 will mean that the down move will get aggravated. Target beyond 3462 will be 3500.

Supports for the day will be at 3399, 3372 and then 3329. A lot of support can be expected in the zone between 3370 and 3390.

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