Above 5400, bears may get excited: Violet Arch Cap

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Above 5400, bears may get excited: Violet Arch Cap

The market has been on a strong foot over the last couple of days. However, Mithil Pradhan, senior vice president - technicals and derivatives of Violet Arch Capital Advisors says, above 5,400, bears are going to be tickled.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets

The market has been on a strong foot over the last couple of days. However, Mithil Pradhan, senior vice president - technicals and derivatives of Violet Arch Capital Advisors says, above 5,400, bears are going to be tickled.

If the Nifty closes above 5,292 today as well, Pradhan will change his view. "After the close above 5292, I will be bullish for as long as I can," he adds.

Also read: Current rally may not sustain for long, says Sudarshan Sukhani

Below is the edited transcript of his interview with Udayan Mukherjee and Mitali Mukherjee of CNBC-TV18. Also watch the accompanying video.

Q: Would you worry about the way the volatility index has been moving up out here or do you think it is still prudent to be with long trades?

A: It is not that every time the volatility index moves up, the market has to move down. In May 2009, volatility index did move up, but then market actually gapped up about 20%. I think above 5,400, bears are going to be tickled. That is where volatility can spike up. But that is not my primary tool to gauge the market.

The Nifty is about to break the trendline of the entire 2011 decline. I have my make or break levels at around 5,292. If market closes above this for one or two sessions, it has done for one session, one more session, I will change my entire view. From February 2011, when 5,700 broke, I became negative for the entire year. After this close above 5292, I will be bullish for as long as I can.

Q: You have got a long out M&M this morning.
 
A: Absolutely. The interest rate sensitive space like auto, banking are performing really well. I saw a triple top pattern building around Rs 710-714. Now, M&M has never been in a bear market. It was the laggard even to join the stocks in the bearish zone. From a long-term perspective, I am very bullish. I have just got a trigger on Friday to go long on this stock. I might take the opportunity with Nifty breaking out as well.