Is the worst over? marketmen say yes

Despite the uncertainties between the April-May Futures and Options expiry, marketmen feel that the worst is over and even bet that the Sensex would peak to 14100 levels by December 2006.

Between the April-May F&O expiry the Sensex has lost only 1168.7 points, a 9.8 per cent drop on a monthly basis. However, May being the worst month till date this year investors lost a fortune as markets gyrated from one extreme to the other on the back of CBDT (Central Board of Direct Taxes) rumours, talks of payment crisis, waning foreign institutional investor interest, et all.

Says Sumeet Rohra of Antique Stock Broking in his characteristic bullish tone, "The markets have weathered the storm for sure. We are very confident that the markets will touch 14100 by December 2006."

Rohra further adds, "And whatever the figures for this month, FIIs will continue to remain positive on the Indian markets."

Sajiv Dhawan of JV Capital Services, on the fear factor surrounding the markets for the past couple of days, commented that "the nervousness is positive for the market and when there is lot of fear in the market, it normally means that the worst is over." Market men would certainly want to agree with Dhawan and his judgment.

Bulls could possibly be seen in action now as the Sensex has doggedly stayed above the crucial short-term support of 10413.

"If the Sensex were to fall below 10413 then it would be quite problematic for the bulls because then one might see the markets going down even further," technical analyst Rajat K Bose had said while speaking to CNBC-TV18.

However, he had cautioned that for any strong, sustainable rally the markets should cross the levels of 11248 and 3335 respectively. "The first major hurdle would be at 3270 for the Nifty and if the Nifty were to fall below 3090 that would create quite a bit of problem," was his warning to investors.

Dhawan, too, had struck a note of caution early morning today before the markets opened. "It is a very important trading day today because for any reason if the Nifty goes down another 30-40 points today and comes back to the recent lows then there will be a sense of panic in the markets and one might get into a vicious circle again."

According to Rohra what caused nervousness in this eventful week was the concerns over the payments crisis and leveraged positions in the F&O segment.

"Basically, what happened during the week preceding the F&O expiry was that the whole system got upset because of F&O leverage positions leading to a tremendous amount of selling in the side market."

However, he strikes a positive note and beams "It is all behind us now and the markets are now poised for a run." His target for the Sensex for December 2006 is at 14100 points. Investors can only hope that Rohra's predictions come true.