The stock markets surprised market observers on Tuesday. The gap was not as much as indicated by the SGX. There was some profit booking followed by a recovery. What should the traders take from yesterday’s actions? Zee Business Managing Editor Anil Singhvi highlighted a few important takeaways. The Market Guru said that the global indicators were not bad at all. 

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Another reason was the Put-Call Ratio (PCR) which came down from the overbought situation to 1.12, Singhvi said. 

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There was profit booking as all those investors and traders who did not have enough strength collectively decided to sell. The data suggests that the Foreign Institutional Investors and Domestic Institutional Investors (DII) did not indulge in aggressive selling activity. While the former sold around Rs 300 cr of equities, the domestic funds bought equities more than this. 

On Monday, the FIIs had purchased stock futures in excess of Rs 1500 cr. All these indicators were pointing towards the strength in the markets, the Managing Editor said. 

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All the apprehensions were over in the morning session itself, he added. As the markets traded in a tight range, traders who were trading with stop losses reduced their positions.  

All that the markets needed was to get lighter to go up.  

He said that the trends are still positive along with the presence of ample funds. Amid no negative global indicators, the markets went up after shedding some points.  

Even today, there could be buying at lower levels. Over the last 2-3 sessions, the only thing that has changed is that there could be some profit booking now at higher levels, the Market Guru said. 

Zee Business has been saying that the markets are giving opportunities of fresh buying at lower levels. The markets are giving opportunities for buying on either side i.e. when it is opening with a gap on upside or opening with gap on the downside. 

The investors or traders should decide their levels to take any position, he further said.