Current market rally dangerously thrilling; book profits and run

Are markets moving towards an all-time high? Even as the Sensex inches towards an all-time high on US Fed’s dovish outlook, _CNBC-TV18’_s Udayan Mukherjee maintains that nothing has changed fundamentally for the Indian markets and hence they are not worthy of an all-time high. “Momentum can take Nifty to an all-time high, but the issues plaguing the economy and market still persist. When markets rise without any strong fundamental backing, historically that has brought a lot of pain to traders,” he said. STORY CONTINUES BELOW THIS AD He believes as long as traders say this is an exit sign, one should take profits and run. He expects the market to rally some more. Read Udayan Mukherjee’s market analysis below: This is one of the dangerously thrilling phases in the market. Not a lot is going for it fundamentally, but the most important near-term trigger which is liquidity has become much better and therefore you are seeing the massive reactions play out in both stocks and equities across emerging markets. [caption id=“attachment_1119557” align=“alignleft” width=“380”] ![Reuters](https://images.firstpost.com/wp-content/uploads/2013/09/stockbroker-reuters3.jpg) Reuters[/caption] It is difficult to say where this momentum wave can carry us. 6,100 is almost here. We are probably standing in the cusp of a 5-6 percent rally immediately, half of which will probably get covered this morning and we may rally on to something in the vicinity of 6,200. Are we going to an all time high? Momentum can take us there, from 6,200 the all time high is just about 3 percent. So that is a day’s work on current reckoning. However, you just have to sit back and look at what the economic fundamentals are and then ask whether this market deserves to be trading at an all time high. You will find that the answer probably is unequivocally no. But that may not stop the market in the throws of the kind of serious momentum that the Fed has injected with its surprising move last night. Right now, it is about momentum. The big thing today is trade management i.e. whether you take profits on a very large proportion or you let them run for another 100-150 points on the Nifty and yes, similarly corresponding on the Bank Nifty as well. STORY CONTINUES BELOW THIS AD As long as traders are telling you that this is an exit sign, you should take profits and run. I think the markets will probably run on some more. But the more optimism you hear, you should get more worried since it means the market is getting overbought, people are getting more bullish on a fairly weak set of fundamentals. I also hear a lot of people saying this is an exit opportunity, 6,100 and no further and typically that trading consensus has proved wrong by a market, which is riding on serious momentum. It is possible that RBI probably has more elbow room to fan the flames of the market a bit more when it meets tomorrow. STORY CONTINUES BELOW THIS AD Raghuram Rajan is a very lucky man. He has walked in with the rupee pulling back and he has got exactly what he would have wanted to hear from the Fed. Does that give him the elbow room to tweak with the marginal standing facility (MSF) and the cash reserve ratio (CRR) changes that he ushered that were ushered in by his predecessor on July 15? If he does tweak the rates markets may rally some more.It could also lead to a lot of the stocks to cover up up their recent losses that is entirely possible as a trade. Watch his entire video above STORY CONTINUES BELOW THIS AD

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Current market rally dangerously thrilling; book profits and run

As long as traders are telling you that this is an exit sign, you should take profits and run

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