Exit when liquidity pushes Nifty to 5450-5500: Baliga

"We have lived on hope for the past so many weeks. But yesterday’s speech of the PM shows that he is also helpless, he has displayed his helplessness very clearly," he told CNBC-TV18.

In this liquidity driven market, one can expect levels of 5,450-5,500, which should be used as opportunities to exit. "You will not have long-term measures to boost the markets beyond those levels," he explained.

Below is the edited transcript of Baliga’s interview with CNBC-TV18

Q: Do you think that hope that has prevailed so far will die down now because over the holiday the Prime Minister made some comments saying that do not expect any major reforms because of opposition, even the hopes of diesel price hike maybe a thing of the past. What are you expecting if anything at all?

A: Absolutely. We have lived on hope for the past so many weeks especially when the earlier FM went out and became the president, since then we have been living on hope. But yesterday’s speech of the PM shows that he is also helpless, he has displayed his helplessness very clearly. Given the political scenario prevailing right now, I really don’t think there can be any big bang policy announcements or measures.

It will be in bits and pieces and if that excites the market, let it be. But, I will surely not go by that and would surely utilize every higher level in the market. Given the liquidity, it is possible that the market moves up some more from here. We could see levels of 5,450-5,500, but utilize that to exit because you will not have those long-term measures to boost the markets beyond those levels.

Q: These negatives have been with us. In spite of it we are relative outperformers in the emerging market basket, perhaps even with respect to some global peers. Is there some desire to live on the liquidity hope, simply because the markets have given return so far?

A: No, I think the traders and the investors have to look at the market in a different fashion. Investors should utilize this opportunity to exit their positions and get into cash as much as possible over the next couple of weeks. But when it comes to traders, it is a market for them to play in.

This bullishness will remain for the next couple of weeks and when you have this liquidity flowing in, utilize the opportunity - go long at these levels. Basically traders look at that 5-6% of gain whereas investors look at much longer term. If we look at longer term, I don’t see much of a hope.

Q: You were also extremely cautious on the market for fundamental reasons, is there something in the mid-cap space whether results or for whatever reasons you see some long opportunities or do you think when you are generally skeptical of the market you wouldn’t go in for those buys?

A: You can go in for a buy for the next couple of weeks. In that case just look at the momentum stocks where you have seen momentum in the last couple of weeks, stocks like OnMobile , SKS Micro and Jain Irrigation . These are the stocks in the mid-cap space, which can move up.

OnMobile can possibly move to levels of about Rs 48-54. SKS, which has moved up from those lower levels of Rs 65-70 to currently about Rs 108 can possibly move to levels of about Rs 124-130. Jain Irrigation, which started moving just a few days back can go to levels of about Rs 115-120.

Q: You wouldn't be worried about the numbers that Jain Irrigation has reported this time?

A: I think it is already there in the stock price. People are looking at the weak monsoon, which will possibly trigger off more irrigation projects going ahead.