Respite for markets after yesterday's big fall

Some respite for the market after big fall yesterday; today the market has pullback somewhat. We are back above 15,000 for the Sensex no way run away rally to be sure 2% up but the Nifty is also up 100 points at 4,600. So from 4,500, we have clawed back to 4,600 though the breadth is not been convincing at all, the midcaps are still lying quiet; the breadth is negative and has been that way since morning though we have improved somewhat and volumes have just been okay today. But some short covering is visible and there is some strength in global markets ahead of the Fed meeting perhaps something like that is rubbing off for now. So some respite for the market, which is good because we had a crunching fall yesterday.  

Q: Will be good to hold it as well in the last leg of trade because we tend to get more volatile now?

A: Yes but if anything trades which need to be covered up in the last one hour would be short trades. I don’t think there would have been too many long trades in the market after yesterday’s fall. So I suppose on the margin the trading position would have been loaded towards shorts and throughout the day today given the premium on the Nifty we have seen some amount of covering from traders because they do not want to get caught with a Fed move which leads to a rally in the near-term in global markets which is a fair enough expectation because when the Fed cuts at least for a day or two, one see a good conditions in global markets and that may well be the scenario tomorrow which is what in anticipation of some of the traders might have cut their near-term short positions and that’s not unexpected at all. There might have been a bit of a nibbling because we have come down to sub-4,500 levels for the Nifty and I suspect that even some of the medium-term mutual fund type of money would have found bargains in the market. So some largecaps have seen buying but it’s quite disappointing the way breadth has shaped up today.