Jan 27, 2013 07:24 PM IST | Source: CNBC-TV18

Don't see current midcap carnage coming to an end: Udayan

It is a Friday but nobody is watching the Nifty these days after the serial accidents that have been going on with names like Housing Development and Infrastructure (HDIL) and IVRCL.

It is a Friday but nobody is watching the Nifty these days after the serial accidents that have been going on with names like Housing Development and Infrastructure (HDIL) and IVRCL. That has got the market and a lot of investors in a very worried state. The Nifty has become a bit of a side show that's holding a range of between 6,000 and 6,050 for the last few days. However, what’s going on in the broader market is of extreme concern for a lot of investors. Otherwise, the global cues are mixed and flat. So, that will not be the impetus. It is what happens with stocks outside the index that will be on focus once again today.

Everybody is going to watch over their shoulder now. One doesn't know what will happen in the middle of the day. There could be some rumor floating and on edoenst know what the next target could be or people who want to push down stock prices. So, there is a little bit of a scare going around in the market with mid-caps, particularly with high-beta infrastructure real estate.

One doesn't know where the next blow is going to come from. However, I think one will see more of what we saw yesterday and day before. The way it ended yesterday, it did not appear that the story is over. So, one can throw a dart and see what is today's pick going down 15-20 percent. However, the mid-cap scene has looked very bad and it doesn't appear that that carnage has come to an end. That’s the space to watch clearly over the next few days and hopefully the week will not end on a too bad note.

I doubt anybody cares what the Nifty will do today because the Nifty has been an unreliable trading tool over the last few days. It has been volatile intraday. People have not made much headway trading it and gains are also very small whether on the long or on the short side. At best, there can be some scalping 20-30 points on the way up or down.

It has been stuck in a range and that too have been very treacherous. Within that range, it has been moving wildly during the course of the day as well. Serious shorting hasn’t started on the Nifty yet because it has been very reluctant to go down below 6,000 and stay there. However, today is the weekly closing. If for some reason, the Nifty heads below 6,000 and spends some time there, then people’s convictions in trying to short the Nifty and see if even the large-caps are headed on the way down will grow.

However, it is a dangerous trade because five or six stocks have a habit of actually yanking the Nifty up. We have seen atleast on two occasions, during the course of the week where the Nifty seemed to be going down below 6,000. But, miraculously it came back at the end of the day. So, Nifty is a difficult trade right now. For people who are not feeling very optimistic on the market, there are probably easier trades on individual stocks or even Bank Nifty as it seems a more reliable trade than the Nifty has been for the last few sessions.

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