EXPERTS ASK TRADERS TO BE CAUTIOUS

Though the underlying sentiments remains upbeat on account of positive domestic and global factors, experts are cautious about the markets in the near term due to the steep rally witnessed over the last few months.

They feel that the markets are unlikely to see a major upside from the current levels. Instead of making bulk investment at these levels, a section of pundits said shortterm investors should lighten their positions while long-term investors could wait for a correction to make any fresh investments. Small investors could also look at making staggered investment over a period of time to spread out risk.

“One should not get carried away in believing that this run-up would continue for good. For the first time this year the market looks overbought technically and hence could shed some weight in the near term. If this happens it would be a healthy outcome. We see signification resistance around the 10,00010,100 mark and do not think the market is ready to get past this hurdle in the current attempt,” said Gautam Shah, chief technical analyst at JM Financial Services.

However, he added that the markets are poised to test new highs in the medium term. “Over the medium-term we see the Indian market scaling greater heights and testing the 11,000 mark and hence investors are advised to stay put and add to positions on dips of 3-5 per cent. The metal and auto sector stocks are likely to see continuing strength while IT and Pharma stocks could end their long period of underperformance,” added Mr Shah.