Choppy trade ahead

CNBC-TV18's, Head Market Research Analyst, Anuj Singhal : Monday’s second half was clearly a show of resilience. Coming on back of a really bad weak and post the IIP numbers, it looked that 5000 was broken for all money. But as the sense may have prevailed on IIP numbers being weak due to base effect, market saw a nice relief rally and Nifty closed above the 5000 mark. Even the midcap index recovered quite a bit of lost ground

But the most perplexing aspect was the way PCR surged to 1.46. Under normal circumstances, that would be a huge positive. But hang on, 18 lakh shares were added in 4800 Put suggesting a few players hedging their positions at around this level.

Going forward, I will watch out for the market breadth and whether Nifty holds around 5000 and defends it. If we can get positive outcome on these two aspects, I think bulls can take the charge again

The strongest stocks have clearly been Cairn and HOEC and I would stick my neck out and say traders should create long positions in both these stocks on declines. At the same time, DLF is now checking everyone’s patience with 6 straight days of fall. Ranbaxy is another stock looking strong

In today’s trade, watch out for midcap IT. A likely takeover of EDS by HP will keep MphasiS stock buzzing and we have seen huge long build-up in Polaris

DISCLAIMER: The author is not allowed to trade in equity markets including Futures and Options. His only exposure to capital markets is via shares of TV18 and Network18 granted to him as ESOPs by the company and investments in some long-term mutual funds.