Technically markets are now positive above 4650 levels. So we have ample cushion left for small corrections, which if & when it comes would be healthy & would give opportunity to participate again at lower levels. However we would advice to keep booking partial profits on every rise from current market levels. Many of small caps are flying without fundamentals backing them & we would advice caution on the same at higher levels.
Fundamentally valuations as a whole are little stretched but that can be discounted if the forthcoming Q2 numbers are upto par. Most important is to watch out what Technology majors deliver & what guidance they give going ahead midst of Weak Dollar & possible slow down in US, from where they derive bulk of their business. RBI meet in late October is also key trigger for markets. If RBI cuts interest rates it could be very +ve for stock market. Inflation seems to be in control. Crude is little cause for concern though. Liquidity is pouring in & may do so if things pan out well in India. Political situation is dormant as of now.
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