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After yesterday's RBI powered rally, the markets settled down to consolidate. With traders jittery ahead of tonight's crucial US Fed meet, the markets slipped into the red. The Nifty closed at 5,166 down 30 points, while the Sensex shut shop at 17,287 down 91 points.

Dipan Mehta, Member, BSE & NSE, said the trend is still up. "But we may be seeing some amount of profit booking, and absence of institutional support at higher levels. What is most heartening is the news flow which remains quite positive on the earnings as well as the economy side, especially the Indian situation where the steps taken by RBI and the policy that they had announced yesterday were extremely positive for our markets. Our focus is on the news flow that is corporate as well as economic. We are quite happy and satisfied with it. There could be a correction of may be a few percentage points here or there, but by and large the market should be able to build on these gains," he added

He feels the markets could remain rangebound. "18,000-19,000 could prove to be a very strong barrier. We will see a lot of action which is stocks specific, where stocks prices are reacting to positive results and statements being made by the management. Wherever there has been fear on account of derivative losses or some one time losses, and as and when those losses are not been factored in or they don’t exist, we are seeing positive sentiment being built in those stocks, and lot of institutional and retail investors are getting into those companies. Over the next 2-3 months, the action will shift to small midcap stocks which have been battered on account of good corporate earnings. We are seeing there is good visibility and the price earnings multiples are quite attractive."

Anil Manghnani of Modern Shares & Stock Brokers said investors could buy on every fall right up to 50-week DMA. "I am getting conflicting views on the charts. A lot of moving averages have been crossed but unfortunately when I start looking at things like RSI or Elliot’s waves, I don’t see the same amount of conviction. Since the levels have been crossed, one has no choice but to play for the next level. One could do so with stop losses because in these bear phases that we have been through in the last couple of months, we do tend to get situations where one can have a false breakout and then after a couple of days it breaks down again. If one is a trend follower or position player, every fall right up to the 50-week moving average would be a buy with only a stop loss below that. So, for the time being that could come closer to 5,000 to 4,950 sorts of levels on the Nifty. Till that one would probably have buy on every fall."

Source: Moneycontrol.com