A slot machine must be easier to predict. Traders may as well toss a coin to game the next directional swing for the market, which continues to gyrate wildly, alternating between up and down every other day. Only a brave man will infer much from a particular closing. If Wednesday's late sell-off suggested further weakness, Thursday’s rally did exactly the opposite. Directional trading is not such a good idea, chances of losing money are very high. Particularly so since every morning there is a gap up or down opening on the Nifty.
In this context, the Nifty's 50-point move on Thursday does not mean much. What was heartening though was the breadth. Mid-caps have had it rough for the past week. The way sectors like real estate and mid-cap banks moved on Thursday, it looked like some confidence could be returning to this space. Stocks that had been consolidating like ICRA, Voltas, United Spirits and IDFC took off again. One does not want to read too much into one day's trading action but it certainly looked encouraging. That is the best one can hope for: stock-specific action continuing even as the Nifty resolves its next directional trend from this volatile range of 4,100-4,300.
The primary market does not seem to be breaking the back of the secondary market, at least yet. DLF is done, without much fuss or any great collateral damage. Even the shorts seem to be getting covered in stocks like Unitech. ICICI Bank looms next but that should get done quite easily as well. Till earnings start pouring in next month, it is back to global market gazing again. Even if there is not a perfect day to day correlation, the general trend in India will probably be the same as other global markets. For traders, it truly is living by the day.
(The writer is Executive Editor, CNBC-TV 18)