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The markets put on an impressive show of strength. The indices were a bit sluggish off the blocks, but strong buying interest in stocks across sectors powered the markets higher. The Nifty closed at 5,012 up 54 points, while the Sensex shut shop at 16,978 up 225 points.

Technical Analyst Ashwani Gujral said the Nifty is trading a narrow range of 4,900-5,100. "The takeaway here is that there is several factors which are against and in favour of the market. One had bad IIP numbers, and oil prices going through the roof, but inspite of a lot of bad news, 4,900 is holding up. My guess is that we will probably break the 4,900 level, collect enough shorts out there, and only then we will be able to go past 5,100. Till then, we will trade rangebound."

Investors should keep their commitments light, he said.

Rajesh Jain, Director and CEO, Pranav Securities, said there is a bit of a political overhang on the markets given the fact that Karnataka elections are underway and the results could have some sort of bearing on the fortunes of the Congress and what its constituents could offer in terms of continued support. "Commitments are slowing down as there will be tremendous volatility should the political boat be shaken. To that extent, despite good corporate numbers and in the absence of news flows other than monsoon over the next 15 days, people are not going ahead with all their buy orders."

He finds the markets fairly stable. "We have not seen the return of panic even though the market has slipped from 5,250 levels all the way down to 4,900 levels, which is a good sign. Despite all the bad news, 4,900 has held and to that extent it will continue to give confidence to investors who are venturing out to buy on a long-term investment basis. That will keep the underpinning of the market fairly stable, if not very strong. The Nifty is likely to trade rangebound around 4,900-5,300 in May."

Jain feels this is not the time for profit taking or portfolio unwinding of long-term investments. "This is a market where you really look for the right levels to buy all the stocks that you wanting to hold and you couldn't dream of buying them because the markets had gone pass 6,000 mark on the Nifty or the 20,000 mark on the Sensex. This is a market where you really try and get your bargains cheap."

Jacqueline Aldhous, Head – Research, Crosby Forsyth Research said there is a lot of uncertainty in the markets and people are wary of entering it. “There is still a lot of nervousness and uncertainty. People are still very wary about diving in. Inflation is a problem and oil is a problem in emerging markets,” she said.

Source: Moneycontrol.com