The benchmark indices ended lower after an extremely volatile session ahead of election results on May 16. After yesterday’s sharp rise, markets witnessed profit booking at higher levels. Banking, metal, infrastructure, technology and oil & gas shares were under pressure. The Sensex closed at 12,019 down 138 points and remained in the range of 12256?11934. The Nifty shut at 3635 down 46 points or 1.25% after swinging in the range of 3709?3610. Among the broader indices – BSE Midcap and Smallcap indices ended flat, gained 5 points and 20 points respectively.

It’s the third time we saw that nifty reacted from the high of 3709 and ended lower on huge profit booking ahead of the election results on May 16. Today was the last day of polling and the process of exit polls will start in the evening. Hence, we believe that there will be extreme volatility and choppiness going ahead till the results are declared.

Markets are trading at a crucial level from where we could witness sharp moves on either side depending on the news and levels breached. Now if we study in last seven trading sessions nifty has been trading in a tight narrow range of 3535?3717 and in this small range we are witnessing huge volatility happening. Now going ahead it would be very difficult to take a call on the market as to which direction the trend is. The best strategy we believe is that one should stay away and wait for the markets to correct and then re?enter at lower levels.

The outlook for the coming week is cautious and one should wait for the markets to settle down as selling pressure is seen at higher levels. The undertone of the market still continues to remain bullish as action is seen in the midcap stocks.

For intra?day support for nifty is at 3580?3520 and resistance at 3660?3720. Markets are waiting for a trigger which will give new direction to the market. We advice traders to wait till the markets break the narrow range and then bet on the market.

Note: We don’t recommend any shares to buy/sell at these levels, let the markets first settle down as the volatility has risen tremendously.