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The markets got off to a strong start today on the back of strong global cues from Asia, and a strong close on Wall Street on Friday, but profit booking at higher levels kept gains in check, and the indices closed with gains of a little over a percentage point. The Nifty closed at 4,573 up 55 points, while the Sensex shut shop at 15,396 up 206 points.

Dipan Mehta, Member, BSE & NSE, feels the kind of relentless selling, which was being seen in the market, seems to have subsided. “There is a bit of institutional support coming in at lower levels, which is a positive. A lot of market players are in a wait and watch mode, and all eyes are on crude oil, which has seen a correction over there. The key trigger for the markets to trade higher from these levels would be a further correction in oil prices to maybe below USD 130 per barrel. If that situation were to occur then one could see the markets trade significantly higher.”

Mehta feels there is enough money on the sidelines waiting to be invested. “At the same time, there are adequate short positions also which could get covered, if there is even a slightest bit of good news coming on the oil front and from other global markets. At the end of the day, investors have to realize that whatever price moves are going to be there, they are going to be quite narrow. Stop losses have to be put in place and followed quite strictly, only then would one survive in a market like this. It’s a bit of a confusing picture at this point in time. It would be better to stay away, there is no necessity to trade."

E Mathew, Director, Mathew Easow Fiscal Services, said the markets are disappointed because 4,630 or 4,650 couldn’t be crossed decisively. “It would be much better if one had a labored sort of a view. This is because the sharp spikes undoubted are not sustainable. It is important that we sustain above the five-day moving average, which is around 4506. The Nifty needs to keep its head above 4,506. It should slowly and gradually try once again to make an attempt to cross 4,630-4,650 and then head towards 4,750. Only after the Nifty consistently maintains above 4,750, can we say that at least the short-term trend is changing for the better. I would like to re-iterate that sharp spikes would not help. It will just help in a little bit of a bear covering, but a slow labored sort of an upmove would be much better for the health of this market.”

Source: Moneycontrol.com