See Nifty bottoming out at 4650-4700: Ambareesh Baliga

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The markets took a breather today after running hard for three days on the trot. High beta stocks from the metal and realty space were the leaders in trade today. The Nifty closed at 5,080, down just eight points, while the Sensex shut shop at 16,955 losing less than 50 points. The broader markets outperformed today, helping the advance-decline ratio close at a healthy 3:2. The volumes continued to remain muted coming in below the 85,000 crore mark.

So, is this just a blip in a bull run or a harbinger of a further correction post this huge rally?

Ambareesh Baliga of Karvy Stock Broking says the market is due for a correction. "I don't think this rally, which we are seeing right now, is of a fresh bull run because of a very favourable budget. I think it is more of a relief rally as we went into the budget season with a lot of fear, which was unfounded, because the budget really didn't do much of damage to the market." He sees 4,650-4,700 as bottom for the market.

Gautam Vora, Director, ULJK Securities, too advises investors to exit around 5,150 Nifty. "On the Nifty, 5,020 is a strong support. As long as we hold 5,020, we should continue to move higher from there. I think 5,090 is a very strong resistance zone. Once it crosses 5,090, we could easily go ahead and see 5,150 on the index in the short-term. A good buying opportunity for the market would be at 5,020 and a good exit time would be around 5,150. Right now, we are pretty much bang in the middle of that range."

Amit Khurana, Head-Research, Mangal Keshav Securities, too says a breakout above 5,200-5,300 will take some bit of time consolidation and a bit of newsflow, possibly Q4 earnings, but the intent has certainly changed for the better. "For 5,200-5,300 to sustain, it will essentially have to be driven by local factors like earnings growth and the outlook that we get here."

Both Vora and Khurana feel that investors should selectively stock pick at current levels. "Rather than selling on every rise or just being on the sidelines, the intent in the market is now to look out for sectors and stocks to buy on dips," Khurana explained.