Excerpts from CNBC-TV18's exclusive interview with Ashwani Gujral:

Q: Technically is that the view that we could seek lower levels and do you think important supports would hold on the Nifty or is it looking like we could go lower?

A: It’s always useful to look at history. In 2006 we bounced back from 2,600 up to 3,200 and then we gave back 50% of that and consolidated around 2,900. If one takes this rally from 4,500 to about 5,300; the 50% replacement is around 4,900. That also coincides with the long-term trend line which gave support at 4,500 that’s risen up to 4,900. So in this kind of a market it’s quite normal for the market to give back 50% of its gain and from 4,900 again the market become well poised and finally achieves its target above 5,500-5,600.

Since we are also looking for a time wise correction this kind of up and down move should be expected and we could head up to 4,900 before we reverse.    

Q: How are the banks looking yesterday was a bad day across the board for those banks?

A: Banks are still in a sort of range. For private banking the range has been defined ICICI Bank around Rs 740-950, HDFC Bank again support around Rs 1,400 and you can ride it upto Rs 1,650.

PSU banking is particularly weak. State Bank of India support is around Rs 1,650 and upside is around Rs 1,850-1,900. So the financials are not showing strength they had their pullback rally and now they are falling back again. So banks could be range bound, smaller banks they moved UCO Bank. But again it is falling back to about Rs 4,500, which is the support. People have to get used to playing these ranges.

Even on textile we get these 6-7% moves. But broadly if you see for the last many months they have been in the same range Arvind Mills around Rs 50 is a support you can ride it upto Rs 65, Alok Industries Rs 60 is a support ride it upto Rs 75, so nothing exciting there.   

Q: What about Cairn India what kind of price targets are you seeing technically on that?

A: Cairn India is the strongest stock in the market and we have been recommending it. I think Rs 240 is a good support the stock is trading at new highs you could easily see levels of Rs 300 and 360 if USD 200/bbl on oil is correct and probably Cairn India will do much better from here.