Short term volatility to continue

It is the day after the big storm. Yesterday the first half was all euphoria, Sensex hitting 30,000 and second half was all panic, the Sensex going back to 29,500. Anuj Singhal of CNBC-TV18 has more details.

He says, "If you had listened to my premarket commentary yesterday as well, even ahead of rate cut we had pointed out that the market is set for correction, the rate cut -- optically it may look like the market was headed higher but ultimately the market had become so heavy that it had to correct, rate cut or no rate cut and the rate cut may actually have provided exit opportunity to a lot of traders.

Even now I would say this, do not short this market but do not take fresh longs. If you have long positions, just increase your trading stop loss. Yesterday that was the advise and today also that is the advise. You increase your trailing stop loss and in that case, if you are stopped out, you are out. But still don’t short this market because this is still a bull market and it may correct but if it corrects, it will give you the trade over the next two-three days about a short-term correction then it can be shorted, not today.

So essentially foreign institutional investors (FIIs) are still buying, that is a good sign at least for the long-term market but then there are a lot of long only FIIs who don’t care about 5-10 percent correction. Their call is much longer-term.