The markets had a disappointing close after it spend better part of the day in the positive terrain. Profit booking set in at the higher level and closed near the low point of the day. The midcap and smallcap indices ended with marginally higher and the breadth was not very strong.

Nifty futures, which were trading at a premium in the morning slipped and closed with a discount. Energy stocks from oil and gas and power sector were among the major losers dragging the markets down. Even capital good stocks ended weak. However, metal and FMCG stocks were trading strong providing support to the markets.

On the back of the Fed statement keeping the benchmark rates as it is at 5.25%, Indian markets began well and traded strong. With a good pull back from yesterdays lows, the markets stayed in the green for most part of the day, only wavering towards the end.

As the Fed did not do much to spook the markets, the markets ran along expected lines today. And with the Fed out of the way, markets aren’t expected to move much. It’s becoming a range bound market and not moving specifically in any direction.

Though, Kalpesh Parekh, Head of Institutional Sales at Ask Raymond James says, “But market doesn’t seem to be on a corrective mode as such. Because, when everybody on the street is expecting some correction, it never comes at that point of time. So at the same time, valuations are also quite decent for most of the sectors and stocks. The market will not move in hurry, so it’s again the stock specific approach rather than going by Sensex or Nifty call.”

He thinks the Sensex should move in the range of 500 points up and down from the current level. It will not go in any one specific direction for longer than 15-20 days. But there may be an up move of 100-200 points, after which we can see a correction. Broadly, it will remain in a similar band.

Having lost steam, there are no fresh triggers for the markets to go up from the current levels. People are also discounting political results. Even the FII flows in the last few days have seen selling pressure. On the positive side, domestic mutual funds are sitting on cash and some large players are buying shares. There’s more action on the domestic mutual funds side, rather than on the FII side.

While, Investment Advisor PN Vijay believes that external factors will affect markets in a major way. He says, “There is no doubt that externals like monsoon, interest rates and political stability will have a very killing effect on markets.” According to him, markets, in the last three years, have had a huge bull run, driven by the economy but valuations aren’t cheap anymore. So macros like these become very important, because one wrong turn could see the end of the bull market.

Rajesh Agarwal of CD Equisearch, on the other hand says he would not recommend a sell, but rather a wait and watch policy. “Because as you see from the last 6 weeks, since the rally is going on, we are not able to cross old highs.” So, there could be a range of 4,030 and 4,230. Unless Nifty crosses either side decisively, there won’t be a new direction. The best strategy would be to buy at lower levels and selling at higher levels.

He suggests stocks like ONGC and Reliance, which are selling at higher levels, as definitely good investments.

He would also wait and watch for the UP elections outcome to see how the markets shape up next week. If the markets break 4,030, then it would be time to sell or else above 4,230 it would be time buy fresh.

“So there aren’t any fresh triggers except the foreign flow. If that comes in strong in the next few days or weeks timeframe, then markets will sustain, otherwise it will be difficult for market to sustain at the current level. There won’t be corrections coming in”, concludes Kalpesh Parekh.