Remain cautious in short, near-term: Experts

The markets survived the IIP scare and closed on a high. A smart surge in the last hour helped indices tide over intense volatility. Nifty closed at 5,013 up 30 points, while the Sensex shut shop at 16,861 up 124 points.

Dipan Mehta, Member, BSE and NSE said investors are expecting the market to retest its lows based on possibilities of a US recession, oil touching USD 150 per barrel and other threats that exist in the global economy. He added that the chances of positive developments also exist in the market, which could take the market further up from these levels.

“All talk of market retesting its low is news driven and people expecting the market to touch new lows are basically betting on occurrence of some negative event which may or may not occur. It could be the US recession or oil touching USD 150 and many other threats which exist in the global economy at this point of time. If one is looking at the market retesting the earlier lows of the year, one is expecting some adverse event, which may or may not take place. At the same time, the chances of positive developments also exist in the market, which could take the market further up from these levels. As of now, its dependent on the news flow which we see coming over the next 2-3 months or so,” he said.

Technical Analyst Rahul Mohindar said the Nifty has moved from 4,890, which is a very interesting point or the trend decider level. "Above that, we have held those levels as well. We saw a good 4-5 day correction and traders are once again seeing an upside opportunity. Going forward, unless 17,100 crosses, I won’t enter the momentum and kind of an upside rhythm that we are really looking forward to. At the same time, I would recommend holding the Nifty long with a stop loss close to about 4,890."