It has been a punter's delight, these last few trading sessions. Walk up to your trading terminal, pick a couple of low-priced items in stock futures, notch up 10 per cent plus on your scoreboard by the end of the trading day, gloat about it over a drink with your buddies in the evening. Return the next day, press replay. More coins pour out of the slot machine. Easy.
Mass participation is rising, the signs are all there. There is a clear shift to stocks with low value--those famous double-digit stocks.
Better still, if they happen to be in the futures segment. All the relative underperformers are catching up with a vengeance: stocks like Mcleod Russell, Apollo Tyres, Midday, Ashok Leyland are moving at the rate of 10-20 per cent a day. Bharti and Reliance Communications are flat but Tata Teleservices (Maharashtra) moved 18 per cent on Monday. Optimists may call this a broadbased market but what is flashing on the screen is more like unadulterated trading frenzy, last seen before the infamous May 2006 crash. Just before that, money making had become equally easy and then came the crash from which these same mid-caps took nearly a year to recover.
Of course, this can carry on for a while longer. It probably will, as a furious rotation game is also on. Punters are moving fast. A sector is hot for about three-four sessions, gains can be as significant as 50 per cent in this period, then they move on to another set of stocks. So first power, then oil, then hotels and tea and so on. It is difficult to guess when the music will stop but danger signs are flashing on the screen.
When it gets this easy, it generally does not last for long. History tells us that. For the moment, traders should pray that the larger cap end of the market consolidates without going for a deep dive. If the Sensex sort of holds out and there is no major trigger for a correction, this mid-cap frenzy can certainly continue for a while longer. Good luck at the races, then.
(Udayan Mukherjee is the Executive Editor, CNBC-TV18)