Supportive global cues may boost markets

Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other CNBC-TV18 anchors have to say Nifty BSE | NSE 30/05/12 Are Mutual Funds betting on Nifty?

Q: What about the market itself and we wait for the final confirmation but yesterday was pretty strong for us?

A: Yes, it had leadership and volumes in the last couple of hours of trade as well. So I am hoping we start with the gap, which looks quite likely 30-40 points and then try and close the gap with 5,300 as much as possible during the course of the day.

It would be interesting to see if today's move up in the morning invites a lot of profit taking. There is still a lot of skepticism about the Nifty's ability to move higher despite what seem like a breakout yesterday. Hence, one should watch the screen very closely today. The signs will be quite telltale.

Q: We broke our first ceiling yesterday. Today, or the next couple of days are the days of reckoning.

A: It is not very far away, the January high, 5,300, if we start the day at 5,230-5,240 you are talking about 50-60 points. That can happen quite easily if there is some sense of momentum in the market as you saw yesterday. We are still in a reasonably benign foreign institutional investor (FII) inflow situation and there is some leadership. So it can happen. It is not a big deal.

In any case after the Budget, the feeling was that the market, having broken 4,950, will head eventually to that level of 5,300.

It just stalled for an unexpectedly large number of days around 5,100 and now it seems to have crossed that threshold with some global help because global markets are also plateaued out. However, yesterday's Fed meeting might probably be indicating that the dollar index will not make it pass 81 in the near-term. This probably is the kind of juice which the traders require to nudge this market higher towards 5,300.

So it is entirely conceivable that we get back to the January high. The bigger question is if there is a breakout of this long standing trading range. You don't want to count your chickens before they are hatched, but it is not a very far away. So people will already start debating what next if 5,300 is crossed. On that, the jury is still out on whether we see a modest breakout to 5,500, but not much more. We are shaping up for a reasonable sized global rally over the next four-six weeks before we get to May and that could be 10-12%. The answer to that is a little unclear.