BSE Sensex closed on Monday with a gain of 417 points at 18660 and NSE Nifty gained 146 points. After having a very fast correction in last two weeks of January, the investors were in panic as the volatility was causing issues with liquidity and payment crisis for some broking houses.

Some stocks which were highly traded by short term traders and day traders were punished very badly by bear operators. Hotel Leela, Chambal Fertilizers, Neyveli Lignite, ITI, RCF and MRPL are a few stocks which left deep holes in pockets of small investors. While some of these stocks are trying to gain in the recent rally in stock markets, the levels before the fall seem too high to be seen in next 2 – 3 months.

Investors are suggested to remain cautious as the current rally may not last longer. Some technical analysts also suggest small investors to use the current rally as a chance to exit their positions in some volatile counters. Investors should only put their money in fundamentally strong stocks for long term.

Reliance Communications gained around 12 percent today as the company filed papers for Reliance Infratel IPO. Pharmaceutical major Ranbaxy gained 3.75 percent to end the day at Rs. 373. Technology counters gained decently in today’s trading session. Wipro was up by 6.16%. Infosys Technologies, Satyam Computers, Polaris Software and TCS closed with huge gains.

Real Estate major DLF closed 8.54 percent up at Rs. 883. The stock touched a high of Rs. 894 on BSE. Reliance, Bharti Airtel, Tata Steel, SBI, Tata Motors, M & M, Ambuja Cements and NTPC were among major gainers on BSE.

HDFC Bank and Maruti Suzuki were among losers in today’s trade. Reliance Energy and BHEL closed marginally down.

Markets are expected remain range-bound on Tuesday. There may be some weakness as well. The US markets opened weak on Monday as brokerages downgraded many stocks. The major credit card provider American Express was downgraded by Technical experts and Investment advisory group UBS.

A Fed rate cut isn’t enough for the US markets to bounce back. Technical experts are looking for positive guidance from major US companies for the coming quarters. The bad performance of US companies may hit the sentiment in Asian and other world markets as well.