The market has kept the momentum going. It's been a solid run on Dalal Street today. What started out as a flat day, ended in strength. Large caps led the rally. The Nifty gained 54 points to fall just short of the 5,350 level. The S ensex too shut shop with a 188 point gain.
Experts feel that the market has shown strength and is likely to continue the run for sometime. Newly-appointed P Chidambaram’s assurance of getting Indian economy back on track and solving tax disputes seem to have worked well with investors.
"It has moved beyond based on the intent of what's been announced by Chidambaram and in case again you don't have the policy action following this, we are back to square one," warns Ambareesh Baliga, market analyst.
As an investment strategy, he suggests booking out to a certain extent. "In case we see those levels of 5450-5500 which I don't really rule out because of the liquidity, I'll be in cash to the extent of about 25-30%," he advises.
Below is the edited Transcript
Q: You were talking about this 5350 level on the index in the morning. We have come to that point. What does the next hurdle look like for the market?
Sukhani: Last week I said there is no direction so, buy puts and calls. Anyone who bought puts and calls is making money, in spite of the loss on puts. Yesterday morning before the market opened I said just buy, that was at 5250. So, the Nifty was almost 100 points up before the buy suggestion was given.
Sometimes the trend is very clear. At this point we are in a complete momentum market, fundamentals don't matter much in this type of market. The first resting point for the Nifty is 5350. However I don't think this is going to act as resistance. It means that we maybe seeing a market that surprises all of us on the upside. Every dip is a buying opportunity. So, we buy every breakout and not make the mistake of going short. We will see these 50-70 point intraday dips coming and that should be bought into.
Q: Would you buy any of the aviation stocks at these levels?
Baliga: I would not buy at these levels. The best quarter is the one which has passed by. The passenger load factor is elastic to the fares, which are already quite high and I don't think these companies can really cut costs any further. Going forward, margins would still be under pressure and what we are seeing now could be the high for the aviation sector. The only trigger could be FDI in aviation which might come in the next couple of months and could take the stocks up a bit further, but till then I think this is the top.
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