Forecast - Lackluster trading may continue tomorrow

Today’s correction was on account of profit-booking and it followed a gain of 425 odd points in the Sensex during the previous three trading sessions. Compared to the surge, the correction was very marginal. This apart, the market also received direction from flat trading across global markets. We are experiencing a dearth of triggers to ascend further. Budget-related triggers are yet to impact trading in a full-fledged manner.

The total volumes of around Rs 45,000 crore in cash and F&O were quite decent.

A lot of investors are seen squaring off their positions, both long and short. That is because the lackluster condition is likely to continue for a couple of more trading days.

Fund-managers and investors world-wide are alarmed on the news that hedge fund, Red Kite, which had substantial investments in copper and zinc, showed a 20% fall in the net asset value of its investment portfolio on account of a fall in metal prices. It is feared that a couple of other hedge funds may be in a similar position as Red Kite and the sentiment itself could ignite a redemption pressure on funds. If funds start liquidating investments to service redemption demand, then a serious correction may be on the cards.

The next support levels for the Nifty are at 4,172 followed by 4,124. On the upper-side, the resistances are at 4,266 and then at 4,310.

- Arun Mewawala, Technical Analyst, K R Choksey Securities