See Nifty holding at 5580; support at 5620-5580: MF Global

Also read: Nifty may not cross 5800 in Oct series: Ambareesh Baliga

Here is the edited transcript of the interview on CNBC-TV18.

Q: It has seen a touch of correction the last few days in the October series. What's your prognosis for the rest of the October series for the Nifty?

A: I think for the moment the market does look a bit sold off in the sense that we are not able to see a capitulation come about because of the way the market has been correcting. It is a bit slow. We would have been far happier if the correction would have been sharper and quicker so that the capitulation could have set in faster and more decisively.

With the way the market is panning out in the last few trading days and even the way it has opened this morning, it appears that the slow slide down is the way it will continue. As a support we are looking at 5620 and 5580.

Q: What have you read in the recent FII data in the futures market because yesterday it appeared that they were probably booking out of some of their long positions?

A: That is true. We noticed the same in the index futures space, the FIIs, the OI was down by about 3 percent and that is primarily on account of the fact that some of the long positions that they have taken even during the early part of this particular cycle was coming in for profit booking. In fact if you look at the data, the aggregate of the sell that happened across index futures, single stock futures and even the underlying cash is a negative number for FII.

Q: Any signs that volatility is about to pick up out here in India, is the VIX or any of the option pricing suggesting that after the correction of the last four days?

A: In fact the implied volatility is almost across all the strikes from 5,400-5,900 for Nifty have been on the uptick. The volumes have been rising quite modestly, 20-40 bps almost every trading session. Therefore, as compared to what we have seen as a very low volatility regime in August and September has come up slowly but surely as far as the beginning of October series is concerned.

Q: You think we will get away with 5,600 in this correction and below that level would market participants start to get a little worried?

A: I think we should be able to see 5,580 hold. I think as against market participants getting worried perhaps it could be an opportunity for some of the astute traders and investors to come in to buy or accumulate new positions.

Given the fact that the framework that everybody was awaiting or was skeptical about has already been laid out in front of us, unless there are serious and grave challenges around a parliament session where most of the policy measures that have been announced do not see the light of the day, I do not think there is going to be a panic in terms of a doom's day kind of a slight.