Mkts likely to head down rather than up: HSBC

Excerpts from Closing Bell 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 Infosys BSE | NSE 13/02/12 Are Mutual Funds betting on Infosys? Other Stocks in this news Wipro |

Traders came out of the extended weekend with renewed vigour. Strong buying interest in stocks across sectors helped the markets power ahead. Profit-booking erased early gains but the Nifty closed at 3,382 up 40 points, while the Sensex shut shop at 10,967 up 163 points.

Also see: Mkts end higher led by metals, banks, midcaps shine

So, how should one trade markets going forward?

Jitendra Sriram, Vice-President and Fund Manager - Equities, HSBC, said there is a risk of a downside is probably more than the risk of it going up. However, he was quick to add that the markets could be in a consolidation phase and looking to move up again. "After moving up from March 9 or thereabouts, the market has given about 35% return now. Nothing ever moves in such a secular fashion. So, I would probably bet that there is a risk of a downside more than the risk of it going up. But it could very well be a phase of consolidation and probably looking to move up again."

Sriram feels corporate results will set the course of markets going forward. "Any disappointment there, given that already there is a burden of expectations on stocks, could lead to pullback in stocks." 

 

Stocks to look at:

Sriram said he would bet on frontliners like Infosys or Wipro from the IT pack. "There is going to be some volatility around the time of results, given the kind of guidance that they will put out, but we will stick to the leaders here. There would have been some amount of gains coming out from the rupee side as well as some amount of integration work which comes through because of the various mergers happening in the BFSI (banks, financial services, and insurance) space overseas. So, you will see some traction on the business front."

 

Strategies to adopt in F&O market:

Rahul Mohindar of viratechindia.com said investors holding onto a long on the Nifty should start booking profits rather than holding it beyond that 200-day moving average. "The market is on course for 3,450 to 3,500 and that is the real belt of resistance. We are not far away and are probably maybe 50-80 points from a big belt of resistance. Once we get into that area, we would certainly want to take some profits out if we have been long from lower levels."

He feels short-term traders should stay long at least in a small way as 3,460-3,500 is easily achievable.

He advises caution past the 3,450 mark. "Any day could just be a spike down from there because I do think that that resistance is going to be reasonably respected at least in the short-term."