Nifty to reach 6000 if it crosses 4650: Rakesh Jhunjhunwala

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 Nifty BSE | NSE 01/06/12 Are Mutual Funds betting on Nifty?

Q: Why did you pick out the level 4,000? Any significance or do you think below that...

A: Instead of 4,000, I would say 3,800 or maybe even 3,600 - no level is sacrosanct - but I would say the level where this market made a gap, that should not be violated on the downside. If it breaks 4,650 decisively, that's what my technical analyst tells me, that market will make or at least challenge the previous high of 6,100.

Q: Do you think 6,100 is possible in 2009?

A: Did you think 4,500 was possible?

Q: I am asking you.

A: Ok. What the technical analyst says - and I also think - if it breaks 4,650 decisively on a weekly basis and holds it for a week or two, then surely we can go to 5,800-5,900-6,000 levels. We could go there, then come back to 5,000-5,200 or maybe 4,800-4,500, make a range and consolidate for a year or so and then make a new high. Another scenario: we break 4,650, we are going to go to 5,850-5,900-6,000, come back to somewhere around 3,300-3,400 and maybe spend three-four years there.

Q: Do you think that's also possible - that the market goes there, halves from there and then spends a big...

A: It happened in 1991. So at this moment, I won't rule out any of the scenarios but I am more inclined towards the first that we will reach 5,800-5900-6000 and then we consolidate - maybe in the 4,500-5,000 or 4,600-5,200 or even 4,000-5,000 range for the next 12-18 months. Then we go into a new high - 6,100 - and go upwards or we go back to 3,000 to 4,000 where we spend two-three years to resume higher.

Q: What is your best guess for the rest of 2009? Do you think we will actually go to 5,800-5,900 in 2009?

A: I have put a lot of caveats there - that the index should cross 4,650 decisively on a weekly basis, hold for a week or two, then I think it should. I don't know where and what range the markets go into, but they will go into a range, spend time and only then are we going to see a big move. We have already seen a big move, we don't know whether this move will end at: 4,800, 5,800, 5,900, 6,000? I think it will surely end before 6,000.

I do not think the Sensex will cross 21,000 in a straight line. We have to correct and we have to make a range and only then we can have the next move.

Q: Range in terms of price or time?

A: Price.

Q: And that range according to you is?

A: Who knows where it will be.

Q: What is your best case?

A: I think it will be anywhere between 3,800 and 5,000.

Q: That big a range?

A: The range could be narrower but 3,800 would be the bottom and 5,000 would be the top in that range. The range could be 4,000 to 4,500, it could be 4,500 to 5,000.

Q: After that you think a bigger bull market will commence, which goes to a new high?

A: The bull market, which has started in September 2001. We had a bull market up to 2008, we had the first leg up to September 2002 after which there was a correction. Then it started from April 2003, that leg lasted till 21,000.

That gets corrected back now to 7,500-8,000 and now we have resumed that bull market. So we can go to 20,000 and again come back to 16,000-15,000, make a range and then make a move which goes above 21,000.

Q: Right now what sums up your state of mind: wildly optimistic, terribly and totally bullish or cautiously bullish?

A: All three.

Q: With an accent on what, the caution or the bullishness?

A: I am cautious.

Q: Why? You said yourself that nobody is participated; the gaon is not into stocks.

A: I am also part of the gaon.

Q: You are a sophisticated member of the gaon.

A: Even the sophisticated ones are caught.

Q: What is making you cautious? You said valuations are not crazy and who are we to say valuations are excessive? Is it global cues which you think may turn?

A: Yes, it is the sheer psychology of the fact that the global economy is in a terrible downturn. That is put into our brains.

Q: It is not the experience of the horrific 2008?

A: No, not all that. We have had more horrific experiences.

Q: Have you? 60% down in one year?

A: Yes, why not? '92, though I made a lot of money back then by shorting but we also 2000, which was the worst year when from 6,000, you came back to 2,900.

Q: So the fear is global, nothing else?

A: Yes, the fear is global.