Commenting on the market's move, Dipan Mehta, Member of the BSE and NSE, said there was a massive buy order in the futures segment in the first few minutes of trade and because of the sharp rise in the implied volatility, there have been huge increases in the margins. "In some instances the margins have gone up anywhere from 4–5 times from what was there on Friday. That is causing a bit of a concern on the liquidity of the brokers." He added there may be some pressure on the clients or at least on traders who are in the futures market to try and unwind their short positions.Mehta expects the market to get into a healthy trading range––maybe 200 points for the Nifty and about 600 points for the Sensex with today’s close being the midpoint.
On the whole, Mehta feels, the market will get into a nice rhythm and will see increased participation in terms of players as well as in terms of stocks. However he cautioned, it is important not to get carried away by the euphoria but still look for opportunities to increase exposure to equities.
While Amitabh Chakraborty, CFA, FRM President (Equites), Religare Capital Market, said one should be cautious at this point of time. He added though that there is a lot of optimism getting built-up on what the government will do in the budget or the next 100 days. Given the bureaucratic situation, he said, the new government may not be able to deliver in the next 100 days as the market is expecting.However, Chakraborty added that with a stable government in place a lot of things would be happened––India would be re-rated from the S&P or Moody's point of view, the investment climate will improve and India would be a capital investment story. He added if India’s growth rate improves to 6–6.5% that will account to about 20%–22% of the global growth. According to him, a country that gives such kind of growth cannot be ignored. "So I expect USD 4–5 billion investments coming in the full year from the FII side." However, Chakraborty, like Mehta, added a cautious note saying, "I think retail investors should be cautious at this point in time."
Rajat Bose of rajatkbose.com expects a further upside on the Nifty. He said that 4,327 mark for the Nifty is a very crucial level. "If Nifty were to stay above that on a closing basis on a persistent basis then we can expect further upside."According to him, between 4,450 and 4,469 is another resistance level. He feels now this band would be 4,300 to 4,475, or 4,500 at best.
Bose expects some kind of consolidation, especially after a vertical move of about 700 points. "So we require some kind of consolidation, and possibly, in that consolidation unless we see 4,549 not being crossed decisively by the spot Nifty, then maybe that support at 4,327 might be broken."
Source: Moneycontrol.com
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