Sell if and when Nifty hits 5900-6000, advises Baliga

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Sell if and when Nifty hits 5900-6000, advises Baliga

The Nifty could see levels of 6,000, says Ambareesh Baliga, COO, Way2Wealth. He advices investors to book profits. “There is no logic for the markets to hold on at these levels other than liquidity factors because clearly oil will be a big issue going ahead,” he adds.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » RELATED NEWS No investor can ignore India: Mark Mobius AMP Capital neutral on India, says inflation a concern 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 Reliance Comm BSE | NSE 29/05/12 Are Mutual Funds betting on Reliance Comm? Other Stocks in this news DB Realty | Unitech | BGR Energy Systems | Exide Industries | Everest Kanto Cylinder | United Phosphorous |

The Nifty could see levels of 6,000, says Ambareesh Baliga, COO, Way2Wealth. "Looking at the liquidity flows and also the feel good factor from cricket World Cup, we could see the markets possibly holding on at these levels, possibly moving to 5,900-6,000," he adds.

He advises investors to book profits. "There is no logic for the markets to hold on at these levels other than liquidity factors because clearly oil will be a big issue going ahead," he adds.

Also read: Market is ripe for a pause, says Udayan

Below is a verbatim transcript of his exclusive interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying videos.

Q: How do you see this week panning out? Do you see more upside for the Nifty going up to 5,900 or even 6,000 or not quite?

A: No, it is possible. Although I was saying that it is difficult above 5,800 levels, but looking at the liquidity flows, which we have seen, especially the last two weeks, and also the feel good factor from cricket World Cup, we could see a rub off there. We could see the markets possibly holding on at these levels, possibly moving to 5,900-6,000.

What should you do at those levels? I think one should be booking out because there is no logic for the markets to hold on at these levels other than liquidity factors because clearly oil will be a big issue going ahead.

Q: So through earning season, what kind of a rough band do you expect the market to move in?

A: It is difficult to give a band. Like I said it is possible we could see levels of 6,000, but again I think people should utilise that to sell. Unless the results are really out of the world, they actually surprise you quite a lot on the positive side, there is no reason to actually hold on to your portfolio at this point of time. One should look at booking around 15-20% of their holdings because over the next two-three months, in case the results do not surprise, you will clearly see some amount of selling coming in. I suppose we will again get back into that band, which we were talking about earlier, which is around 5,400 to 5,800. I see that band happening possibly over May and June.

Q: How would you approach some of the stocks that maybe impacted by the 2G charge sheet, Reliance Communications , DB Realty , Unitech ?

A: All through I have been saying, whenever there is an issue with any group or company, authority, it is best to stay out. So, the same still applies. I think for those holding DB got a decent chance to at least cut their losses to a certain extent, when we saw 40% move. That move is over. We should see much lower levels than what we are seeing in the recent past, same applies for Unitech.

Q: There seems to be a general refrain in the market that midcaps and smallcaps will catch up, do you see that trade playing out.

A: Possibly yes. Last time you had asked me this question, I told you that possibly above the levels of 6,000-6,200 you could see the midcap and the smallcaps playing out. But the way things are right now, I think over the next one week-ten days you could actually see the midcaps and the smallcaps outperforming. That in fact could be the last leg of this particular up move which we have seen in the past couple of weeks.

Q: If you are expecting the market to correct, what would trigger off such a correction? Do you think it will be crude, do you think it will be an earnings disappointment because now the mood in the market seems to be much better? So, what do you think can precipitate the fall?

A: I think it would be a bit of both these because crude think USD 118-120 per barrel to a certain extent is there in the market. But once we see crude actually climbing beyond that, the way things are, it is possible that we could see crude climbing beyond USD 120 per barrel. If that happens, that could be one of the reasons.

The second reason could be the results because the expectations are still decently high. In case there are any disappointments, especially with those largecap, big banking names as such, we will see the start of a fall.