Today, we expect a cautious start due to indecisive trend in Asian markets. Trading pattern for the rest of the day will mostly hinge on global markets and trends in liquidity flows. No major fall is expected, though some reversal may not be ruled out after a three-month rally. Signs of weariness are quite apparent among the bulls even though the Sensex eked out 1% gain last week. The broader markets actually cooled off after a frenzied run. The bulls have been doing a lot of running since early March. In fact, they may have come too far too fast. This increases the chance of fatigue. Same holds true for most global markets.
With company insiders resorting to more selling than buying, one wonders if their respective counters have hit the glass ceiling! Market players would prefer to lighten their positions ahead of the F&O expiry when 50 stocks will go out of the NSE derivative segment. The coming month will see smaller lot size for many scrips.
Budget and monsoon are the two big events that would have a bearing on sentiment. We will also have to contend with the latest quarterly earnings and RBI's update on the monetary policy next month. Overall the bulls are likely to maintain their hold over market proceedings, but don't be surprised if they run out of gas once in a while.
A sideways movement with a positive bias is what could be in store for us in the run up to the budget early next month. Select stocks will continue to hog the limelight based on the newsflow. Taking some cash off the table and sitting on the sidelines may not be a bad idea at this juncture when the near-term outlook is a little hazy.
