Sushil Kedia of K&A Securities said 4,940 is the number which is a much stronger support. 5,000 really has nothing discernable left in the recent past to act as a support area. Before it goes to 4,940- 4,950 area maybe it can bounce back as much as 250-180-200 as well.

Excerpts from CNBC-TV18's exclusive interview with Sushil Kedia: 

Q: In the very near-term are you expecting 5,000 to hold?

A: 4,940 is the number which has a much stronger support. 5,000 really has nothing discernable left in the recent past to act as a support area. Before it goes to 4,940- 4,950 area maybe it can bounce back as much as 250-180-200 as well.

Q: How do you trade now, we are almost at the midpoint of the two levels you spoke about?

A: Don’t trade.

Q: But if you had position open?

A: I would not have kept the position open in the middle of the road. Why do people trade essentially? They trade for the short-term. Within a discernable trader over a longer time frame when prices are bouncing off to the extreme of the potential range around the trend and that is why people are taking positions in the direction of the trend perhaps.

So if you are in the middle of the road, at the mean, you don’t keep a position open and I think from the last four days of slide, a couple of efforts to try and get into a bounce off has not worked and so perhaps this bounce off has to be ignored and if it comes to 5,180-5,200 there is a possible trade to short there and maybe you can earn up to 4,940.

If such a strong bounce doesn’t come then maybe one stays out for a while and as and when that final strong support area of 4,950 odd comes one will evaluate a long trade there.

Q: What sense do you have of the trend from here, can you discern whether this uptrend which started at 4,500 is carrying on and this is just a counter to that bigger trend or do you think that upmove of 18-20% is over?

A: The move that started from 4,600, even though it remains to be of a suspect quality, doesn’t not look to be over immediately as yet. Within that move from 4,600 that we saw last time, 4,940 is a pull back area from where the final surge should come, going to as much as 5,300 and that is where perhaps it will taper off, culminate but nothing is definitely deterministic and one will have to play each day as it comes. Should 4,940 break, it will be over and maybe there will be a deeper downside to retest 4,600 there.

Q: Do you track crude and can you marry that with the way you see two stocks moving, ONGC, and Cairn?

A: Crude has been giving sharp pull backs despite the humungous bull run there and typically from the 100-150 years exchange traded market history available on commodities, the last phase of the bull run seems to he the most extended one.

To put it simply, the lows on crude we saw around USD 58-60/bbl area last year, the move starting off from there is perhaps the final phase of this 7-8 year old long bull run on this commodity and within that it is early to say whether it will go USD 250 or USD 150/bbl or whether it will taper off at USD 125/bbl. That cyclical uptrend remaining intact within that there is a potential short-trade on crude perhaps on Monday with a stop loss in the vicinity of USD 126/bbl with a pullback possible to USD 104/bbl.

If USD 104/bbl does not hold it can collapse all the way to USD 84/bbl as well. Although one is not saying that it will go to USD 84/bbl and USD 104/bbl is a much more probable area until USD 126/bbl is taken out and now that is in expectation one has vis-à-vis expectations of other people on crude and how they are playing the various stocks and various markets.

It is much safer to look at independent price patterns on the other stocks and markets, within which if we focus on ONGC and Cairn; the sort of pattern ONGC has created post the collapse of January this year it has not yet confirmed to be a rising wedge which is generally very bearish but it has a 60% chance that it will pan out into that. Within that wedge there are inner wedges built in, so Rs 960 is the area from where a bounce can come and should USD Rs 960 break, one will clearly say it is good for USD 700 and bounce from Rs 960 back to Rs 1,100. It is still within the wedge and if it goes past Rs 1,100 only then one will have the gumption to say there is no risk and it's joining the uptrend. So as of now within this play up to Rs 960, Rs 1,040, Rs 1,100 and if Rs 960 breaks, play for Rs 700 or lower.

Cairn is clearly at an all time high and within a high, all potential resistance areas is mere imagination and projections. Using certain techniques I would think it is going to be difficult for Cairn to right away blast past Rs 300. The downside in the short-term can be as much as Rs 260 and if that breaks it becomes pit less. So looking at where the oil prices are now and projecting the next years' balance sheet and the next five years' balance sheet, some people are comfortable playing this game. It may not be this rewarding. Focusing on price patterns, Cairn so far is good for Rs 300 until it breaks Rs 260 and it breaks Rs 260 it comes in the new regime.

Q: How is the Dow chart looking to you now?

A: The rally that began there earlier than most markets has perhaps come into a resistance area. As I said on Nifty similarly this upmove is not looking complete with a pullback for one-two days. There is a final surge pending there as well and 2.5-3% from here as well there is a clear resistance up there. And more than Dow Jones, I think the Chart of S&P Futures is more liquid and provides a better yard stick to short-term moves.

I think 14,040 areas is where I would draw the short-term level and it looks difficult, but post that both Dow and S&P will be good to retest the lows we have witnessed twice this year and so until 14,040 is taken out I maintain that view.