After hitting a high of 8,320 a few days back, the market appears to have entered the consolidation zone, closing in the red for the third consecutive day today.
CNBC-TV18 checked in with three analysts to get a cue in into what has been bothering the market.
According to Mehraboon Irani of Nirmal Bang, the reason for the consolidation is the good old reason: earnings.
"Expectations have been very high in the market [for a few quarter]," he said. "It seems that the market is losing its patience. We can't have stocks going at 30-35 times earnings multiple and not have earnings catch up."
"As long as earnings don't improve, the PE ratio won't expand," he added.
Irani maintained that the market is in the process of adjustment and could fall 5-7 percent before stocks could become attractive again. He further added that the Bihar elections were also a risk-asymmetric event for the market. "If the results are favourable, the market won't rally too much. But if they are not, it could fall a lot."
But SP Tulsian had another twist to the market's goings-on.
"This pain has to do with the upcoming expiry," he told CNBC-TV18. "There has been poor put writing of late and writers need to realize that while it's easy to earn small money off writing options, you have to pay a lot [if the market goes against you]."
But Sudarshan Sukhani of s2analytics.com said that instead of worrying about market direction, traders should simply go with the trend, which currently appears down.
"With the market breaking 8,200, we go short with a stop-loss of 8,250 and let the market tell us where it wants to go," he said. "This could be a false breakdown [after the break of 8,200]. Intraday moves can be deceiving."
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