Mkts tank further: How are experts reading this volatility?

The week went by has been chaotic for the markets with umpteen twists and turns. What kick started with an elated mood lost steam mid-way and closed with a cut of over 0.5% on both the Nifty and Sensex. Friday was extremely disappointing with a fall of nearly 2% on the bourses? the Nifty shut shop at 6,062 and the Sensex closed at 20,125.

Wednesday?s magnificent triple digit rally made way for talks of a new high that the markets might hit. This was soon followed by a 150 points drop leading to pressure being built up. So how are experts reading into all this volatility?

 

The markets are currently driven by liquidity and at some point people would find it a bit expensive, says Ambreesh Baliga of Karvy Stock Broking. ?They would be pulling out liquidity and that?s exactly what is happening right now. Traders feel that possibly the markets do not have too much of an upside from here. Because of which people are booking out at this point of time and I think again we are close to that 6,070-6,120 band. And, in case we break that then yes I think there is some more trouble for us.?

Technical Analyst Ashwani Gujral says, ?I won?t say the market has broken down; it?s been doing these wild swings because a lot of weak hands have recently entered?it?s still between 6,050 and 6,240 and you wouldn?t be surprised in watching another 300-400 point up in a day because once the market starts moving in one direction everybody piles on. So I don?t think it?s a very trending market, it could remain very volatile but within a range.?

The cash pull out can take the market down by a couple of 100 points as far as the Sensex is concerned. ?It depends on how much oversubscription we are eventually looking at. Coal India being a 15,000 crore issue if you are looking at 20 time subscription, we are looking at about Rs 3,00,000 crore being used as margin for subscribing to the issue. The money will come back definitely but for sometime this kind of profit booking, this kind of pressure in the market will be there and this last two days we have been seeing that and somewhere this will end. But we have to be bear with it and I think it?s a great opportunity for long-term investors or anybody serious about markets to come in and take position. Nothing has changed, fundamentals haven?t changed, and it?s just the liquidity story playing out one way or the other.?

For the next 7-10 days, the nifty has a base of 5,800-5,830, says Baliga. ?The markets will possibly hold on in this range at least till the Coal India IPO gets over. Post that there could be decent amount of selling coming in and we should possibly look at much lower levels because we feel that the markets are overvalued by nearly 20%. The real value for the market at this point of time seems to be closer to around 4800-5,000. So once it breaks that 5,800-5,830 we should see those levels but at the same time during the next one week I will not be surprised if we again try to scale that 6,200-6,220 mark but that again should be utilized by people to sell.?

We are the Best share market tips provider in India for Intraday trading of cash , Nifty future and Nifty Options.We give only sure shot tips so that you can trade with high volume in stock market .