Rajen Shah, Chief Investment Officer, Angel Broking, is not unduly worried by the correction in markets. "Over the past eight trading sessions, we have had a fabulous run up in the markets. From about 13,200 levels, we touched almost 15,300 levels. So, we have had a fabulous run-up and that too in a short span of time. If the market is taking a pause or breather or correction, I don’t think there is any reason to be unduly worried about."
He too does not see major downside from current levels. "The markets are going to remain buoyant. We could see sharp corrections like the ones that we saw today. Lots of money is waiting at every correction to enter the Indian markets. May be we are in a corrective mode, but I don't see major downside form here. We may see buying emerge be at every lower level."

At 15 times earnings, Shah feels the markets are fairly priced. "But if liquidity just keeps on coming in, we could even go up to higher P/E multiples of maybe even 18-20 times. We could see higher P/E multiples for the Indian markets over the next few months or a couple of years down the line."

Jagdish Malkani, Country Head, Taib India, feels volatility will continue going forward. "Liquidity is here to stay. In that period, the undertone will continue to be bullish, so play the game that way. Those who are looking at fundamentals etc are wasting time because this is a momentum game. One will see extreme bouts of volatility like today. Liquidity is driving up the market now. This party could go on for a long time. However, valuations are not compelling in lot of the stocks. So, just go with the flow."

Vijay Bhambwani of bsplindia.com feels 4,400 is a make or break level on the Nifty. "4400-4450 is very critical because in 2008 the markets touched this support twice. After this support was violated, it went down. If we break 4400, it could even see those head and shoulder targets of 3875 or 3650 materializing, provided the decline is on very steep volumes. Today, you are seeing distributions, volumes are higher, markets are tempted to make an up thrust but failed and terminated at about 4560. That should be treated as a short-term top now."

source: MC