Moneycontrol Bureau
It is despair that unfolded in the last leg this Thursday. A heavy sell-off in the last hour dragged down indices that were already on a down slope. The Nifty ended with a 66 point loss much below the 5,100 level and the Sensex too bled 206 points to shut shop at 16,639.
Dilip Bhat, Joint MD, Prabhudas Lilladher explains that though the factors were against market, there was some kind of relief rally build on expectations of reforms after the Presidential election. However, the market is disappointed now; also European factors are weighing very heavily.
Hence, Bhat feels that over next 6-12 months possibly the market will see a level decisively south of 5000 and maybe closer to 4500 and maybe lower than that gradually.
He warns further PSU banks may lead the fall followed by capital goods particularly Larsen and Toubro.
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"I think in the intervening period I would still be looking at something like 4800 levels. Of course it will be interspersed with some amount of rallies, but apart from capital goods, banks I think some of the FMCG names also should give away this time. The valuations really are too stretched and too many people are hiding behind that and it’s really one of the most over-owned sectors," he elaborates.
Sudarshan Sukhani, s2analytics.com suggests to remain long in Nifty option in small volumes assuming that in the next 5-10-15 days some news will come that will push the Nifty up at least for a temporary period or may be perhaps for a longer period. However, for short term traders, Sukhani advises not to do any day trading or swing trading. "There is nothing that I can see for tomorrow also," he adds.
Meanwhile, talking about the July series expiry Siddharth Bhamre of Angel Broking explains, "Unfortunately today we were not in between of strikes, we were at 5,100 but lot of weaker hands have adopted same strategy again. That is to selll 5,100 call and 5,100 put and more so even some people sold only 5,100 put and the premium which they got by selling these two ever since morning is around Rs 15-20. This is the reason market is making sure that weaker hands who blindly written this Options just to pocket in last day’s premium won’t make money and that’s the reason this fall has come."
Nasrin Sultana
www.marketfutureindia.com
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