Recovery process has begun in mkts: Bhambwani

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Recovery process has begun in mkts: Bhambwani

Vijay Bhambwani of bsplindia.com says that the process of recovery has already begun in markets. He adds that it takes time for traders to come back in the markets because one needs money and nerves .

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Excerpts from Midcap Radar 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

Vijay Bhambwani of bsplindia.com says that the process of recovery has already begun in markets. He adds that it takes time for traders to come back in the markets because one needs money and nerves.

He adds that  Reliance Industries and ONGC  would lead the market from the front if it rallies.  

Excerpts from CNBC-TV18's exclusive interview with Vijay Bhambwani:

Q: The kind of low that the markets made in trade earlier today, could you say that we are atleast somewhat out of the woes or is it too early to call? We have good international cues and that could be pulling us up?

A: The process of recovery from the falls that we saw last week has already begun. It takes time for traders to come back in the markets because one needs money and nerves to come back to the markets. I think not money but nerve is more of the problem and that always take its sweet time.

Given a fortnight or so the markets has given a fairly good indication of where it wants to go, and I have a feeling the worst should be slowly but surely put behind us. Probably one could see one or two hiccups along the way but 9600-9800 on the BSE Sensex and probably 2850 odd on the Nifty-Fifty should hold.

Q: How much of this recovery that we are seeing at this point in time could be attributed to short covering and how much of it is coming in terms of fresh buy positions being taken on Option side?

A: Let's not forget the fact that the markets are trading fairly light in terms of F&O positions. There are not too many short positions out there to cover and that is making the markets more vulnerable. In a falling market there are only short sellers who are interested in buying in a significant overnight fashion, because they book profits in a declining market.

Since the short sales are fairly limited at this point in time and the markets are somewhat in weaker hands, one is seeing long positions getting butchered as stop losses are hit. Therefore lower tops and lower bottoms form on the charts. When the markets are going up they are more because of value buying or bottom fishing or rather than only shorts covering.

Short covering is there, but its not just short covering that is taking the market up.

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