Jai Bala, Cashthechaos.Com believes that the market is at a very important stage currently. He sees more upmove in Nifty from the current levels which will take out 5,630 levels.
However, if it fails under 5,630 then that will be very bearish. "It is going to take turn for the worse. So, at the moment you have to wait and watch," he told CNBC-TV18.
He suggests that one should now have a very limited exposure to the market or one can stay in cash.
Below is the edited transcript of the interview. Also watch the accompanying video.
Q: How would you gauge the kind of movement you have seen in the index so far and what should the trading stance be now on the Nifty?
A: The markets are at a very important stage. If you look at it from a little bit longer time frame, there is a possibility that what we are seeing is a bullish phase in a broader bearish market. So, there is a possibility that there is one more leg up for the market from here, which will take out 5,630.
If the market fails under 5,630 then, that will be very bearish for the market. It is going to take turn for the worse. So, at the moment you have to wait and watch. You got to have a neutral or a very limited exposure to the market or stay in cash at this point in time.
Q: If the market were to turn from 5,630 or below that at what point below which would you be comfortable adding to some of your short positions?
A; From positional trading perspective, if the markets were to close below 5,630, that is going to tell me that the market is going quite deeper. I am going to look at a retracement to about 5,077 on the Nifty in two-three weeks time perspective. But, at this point in time the markets are heading closer to highs it made in the middle of February.
I suspect market is going to fail somewhere closer to 5,550-5,560 and the market are going to turn lower from here. But it doesn