Things are a bit better globally. While we were closing trade yesterday, it looked like things were getting scary or shaky once again. But Europe stabilized, the US markets had a bit of a bounce overnight and Asian markets are stable. So we may not rally today, but at least after yesterdays cut it looks like things might stabilize a little bit out here, says CNBC-TV18s Udayan Mukherjee.

After chancellor Merkels statement disappointed markets the day before, Germany and Frances announcement that European stability fund may be expanded to 2 trillion euro has boosted confidence. The varying opinions coming from Europe makes for a volatile market, but not necessarily a break down which was the fear that was surfacing yesterday once again. So I believe we will amble till the end of week, when we have the European summit.

So I guess markets globally remain in reasonably okay shape all things considered, especially after the doom and gloom that prevailed a fortnight back. But for them to progress significantly from these levels, you would at least have to see a glimmer of hope on Sunday leading up to some concrete positive news on the 4th of November. I think the stakes are too high now and market expectations have been wetted by all those comments. European authorities have realized that the cost of inaction will be too dramatic for all asset classes, but whether they deliver hope on Sunday or couple of weeks down the line is what we have to figure out.

We were shaky yesterday, but at least we put up a fight at that 5000 mark and so I think we are okay for the movement. We had a 400-450 point rally from the lows, after which we saw a 150-200 points pull down. But that should neither be unexpected nor shake confidence in the uptrend per say. What happened yesterday was probably a bout of profit taking.

For now we remain okay; may be a bit range bound till Sunday as we wait through earnings. The start of earning season has been a bit patchy as well, but I dont think there is enough on the screen which is suggesting a u-turn just yet. I expect us to remain range bound till Sunday. The decision coming out of Europe on Sunday will help traders ascertain if we will go above 5200 next week.

I think the index is probably going to be range bound for the next three days. Someone was just mentioning that expectations from the event on Sunday from Europe have been diluted considerably, but thats a good thing because we wont come back and slump with disappointment on Monday. If we go in saying Sunday may happen, may not happen and that if it doesnt happen there is still 4th of November, then something will happen and thats the right kind of attitude, thats the more balanced way of approaching it. The chances for huge positive surprise or a massive disappointment then get considerably watered down and I think thats just as well.

So the best case for the Nifty or reasonable case for the Nifty I think is that we amble in this 5000-5200 kind of range till Friday and then depending on what way the news swings we get closer to 5000 or 5200 and try and see if we can snap out of this mini range. Its unlikely to be very exciting because there is a lot of news flow right now - we are contending with earnings and you have seen that reactions to many of the earnings from Reliance to TCS to HCL Tech have been very sharp and thats something which the market or even the index has to digest.

So as we move forward in to the earnings, even if we hold a 5000-5200 range for the next few days, with expiry as early as Tuesday next week, I think it all makes for staying where we are for the movement with some intraday volatility. Depending on the global news, we will probably make a slightly more decisive move around Diwali next week.

There is not much you can read in the internals to be honest. I think a lot of the traders had positioned themselves in the options market for a break past 5200 and may be an extension of the range to 5400. But because of some global commentary and the way the Nifty has moved these last couple of days, that exuberance or optimism has got rained in a little bit. So I dont think the options activity yesterday was very telling but what happened was that some of the higher calls which were written got snipped out a little bit and thats probably the option writers we are seeing.

Yes we are okay with the market, but not gung-ho bullish that 5400 is coming in the next 2-3 days. So thats the little bit of adjustment which has happened over the last couple of sessions. Otherwise, from the cash market data, marginal selling on the Nifty futures, a little bit of short positions being laid on yesterday by the FIIs, but they are too small in quantum to be very conclusive in terms of taking away something from the internals. I guess the internals are also saying the same thing that for now we are in the range. If the market tells us that its ready to move out of the range, then new adjustments would need to be made, but I dont think the internals are leading the market now.