Market outlook: Experts suggest caution till 2700 Nifty breaks

It was a lukewarm rally on Dalal Street as the stellar rally on Wall Street failed to lift traders' spirits. Mixed cues from the economy too didn't help. Inflation for the week-ended February 28 came in at 2.43% versus 3.03% week-on-week (WoW). This is the lowest inflation number since June 2002. The January Index of Industrial Production (IIP) number came in at -0.5% versus -0.6% in December 2008.



Markets closed in the green on the back of strong showing by autos and banks. Nifty closed at 2,617 up 44 points, while the Sensex shut shop at 8,343 up 183 points.

Amit Dalal, Amit Nalin Securities expects the Nifty to trade volatile till the 2,500 to 2,700 range is not broken. However, he was quick to add that it is not expected this week. Technical Analyst Ashwani Gujral feels there will be positive news once the Nifty crosses this zone and advises caution till then.

Experts outlook on markets

Amit Dalal, Amit Nalin Securities is of the view that a bear market rally has started in the US but sees a positive trend going on from here. “The markets have seen a huge sell-off in the last couple of months. They have covered a lot of ground and there is perhaps a case to be made out that fundamentals are improving. We have some kind of global positive scenario in the US markets. If that pans out in the next 15 days, then you might get a closing for this month higher than the F&O closing which you got last month.”



According to Dalal, emerging markets are not something that is looked at with the same way the US market is looked at. Therefore, there will not be same FII following. “One should look at what is the downside, why should the market go down another 500 points unless you see rampant selling taking place and right now I don’t see that many factors telling me the market should be 500 points lower than where we are right now.”



Dalal believes that markets are very volatile. The 2,500 to 2,700 range is still not broken, is bearing upon trader’s patience and will continue to do so until something substantially different happens which is not expected this week.

Ashwani Gujral, Technical Analyst sees the current market rally extending to 2,680 or 2,700. According to him, 2,700 to about 2,800 now is a huge congestion zone and once Nifty crosses this zone there will be positive news. He firmly believes that because of the elections markets may underperform even if there is a global rally. People need to be cautious till markets are below 2700, he added.

Source : Moneycontrol