Amit Dalal of Amit Nalin Securities believes that the markets look a bit risky from a technical perspective since the markets do not seem to break out very easily. Hence, he feels that the markets could be witnessing some amount of fatigue at current levels.

From a fundamental perspective, Dalal believes that the earnings have been spectacular this quarter. Dalal feels that the midcaps will perform well, he also observes that those companies that have delivered good results, have seen a huge spike in share prices.

From an emotional perspective, Dalal feels that everybody is over-confident about the markets at this point of time. He says that everybody thinks that the markets will break the 12,700 levels and midcaps will begin participating in November.

A: Let's take all three parameters - technically, fundamentally and emotionally. Technically, the market looks little risky because we are at the same level, which is our all-time high. It doesn’t seem to breakout that easily and it has been there for a while now. There could be some fatigue at that level also. So one has to wait and watch.

Fundamentally, we are in Shangri-La, I think the results have been spectacular. Almost any company, which shows perhaps less than 20% growth, one starts felling sorry for it. We did a small study on that. Among 500 companies, if you take companies above Rs 800 crore turnover and split that below Rs 800 crore, the growth rate of net profit of the companies below Rs 800 crore was 20% higher on aggregate level than the companies above Rs 800 crore turnover. This tells me that perhaps the midcaps will start now following. Already the ones, which have given good results, there has been huge spike in the share prices.

And emotionally, I think everybody is little overconfident right now. Everybody thinks that we will break 12,700, midcaps will start participating in November. That’s perhaps that only caution that I can see in the wind, right now.

I might have bought, sold or recommended any of the stocks that we have discussed. But this was just a pure analysis, not a recommendation.

For stock views, watch video