After a bloodbath session on Tuesday, when the Nifty lost 89 points due to the DMK calling off its alliance with the UPA over Sri Lanka issue, the agony continued even on Wednesday with the Nifty losing 52 points to end the day below 5700.
In an interview to CNBC-TV18, Shardul Kulkarni, Angel Broking suggests to hold on to short positions only till the Nifty holds 5750 and the banks are negative. On the lower side Kulkarni recommends going short at 5663.
Below is the verbatim transcript of Shardul Kulkarni's interview on CNBC-TV18
Q: What is the intraday trade that you have on the Nifty?
A: After yesterday's trading session, we are seeing that the market on the hourly chart is still in the strong lower top, lower bottom cycle. It would make sense to hold on to short positions if traders have created them. Today's high which is around the 5750 mark should be your stop loss. If the market were to cross 5750 on the Nifty spot, then it makes sense to exit all short positions and move out of the market because you may see a bounce from oversold conditions.
The advance-decline ratio is in the favour of the declining counters, plus you are seeing that individual stocks in the banking space which has a major weightage on the index, are cracking. ICICI Bank is already down, SBI has fallen 2-2.5 percent, HDFC and HDFC Bank are also not supporting the market in a big way. So long as the banks are negative and 5750 holds on the Nifty spot, it makes sense to hold on to short positions.
Q: What are the goalposts you are looking at in the Nifty itself? Where does support emerge at all?
A: On the lower side, the first support is at 5663 which is post the day of the Budget. That particular support level is the first one that comes to my mind and the next one is the 5540 mark, the lows that we formed in September 2012. So 5540 and 5663 are the near-term support levels that we are seeing on the daily chart. They are quite far away from the current levels, but the momentum in which the market is right now and the way individual stocks are cracking, 5663 is something that traders can possibly look at as a potential target for their short positions.