Mkt won't fall much even if Budget disappoints: Atul Suri

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Trader Atul Suri says levels above 4,950 can propel markets to 5,300. "Key support zone to watch out for the markets remains 4,500-4,600."

According to Suri the market will find support at 200-day moving average if there is a knee-jerk reaction on the back of a disappointing Budget. "The downside appears limited due to low expectations."

Below is a verbatim transcript of the interview.

Q: We have been range-bound for ever it seems. Is today our day to break that range?

A: Absolutely. We have been in total pain as trader -getting whipsawed-in fact just reducing positions size and through my 16-18 years in the market, I have rarely seen such a low expectation and build-up in the Budget whether its on the analyst side who have their wish-list or expectations or even from the traders point of view. If you take the Budget day away from today-you there is nothing. You could very well have gone for a holiday with Monday being a holiday and then come back and focus on global markets. But it's been absolutely flat, low volume and just doesn't feel like the euphoria, the hype, the build-up, sectoral buildups-there is absolutely nothing.

But the good part is that over time it's important that the Budget becomes a less of an event, less of a day when only polices can be done. They can be done all-year round. This is just another days when the government presents its financials. That is what we are getting into. We are getting into a very low expectation, very range bound markets.

But beyond this, next week, Monday being a holiday, I feel the directions that would come would be from global markets because when I see the global charts, those are very interestingly poised. You have been having this big global equity rally and you have been having a weak dollar, which unexpectedly in the last few weeks or so, has shown lot of strength. Whether we like it or not, the Dollar Index is still a very good parameter to tell us, to show the relationships between markets.

Especially the emerging markets place and I think that is very interestingly poised at just below 81 and 81.50 on the Dollar Index remains a very important level in case it takes that out, I think you could see a very big rally in the dollar and that I think could spook a lot of commodities and a lot of equity markets.

So looking beyond just a day or two where if you don't expect anything massive in the Budget, I think we will flip back to global markets and all eyes as far as I am concerned for direction would still be on the dollar.

Q: While we've broadly been in that range of 5,200-5,300 on the top and 4,700 at the bottom, a lot of short-term traders have been talking about 4,950-5,000 as a near-term top. Is that legal significant at all on Budget day? If crossed could it pave the way for bigger rally out of this range or do you think that level is not very significant?

A: Any bull market, which I think we are in, has a basic premise of higher bottoms and higher tops and we have made a higher top at 5,300 plus, we haven't made a lower bottom, so I would still hold the view that we are in the bull market. To really get into a bear market we have to cross that level of 4,540 or thereabouts that there are.

What has really happened is that when I look at the charts on a shorter time frame or the range that we are in, I find that lots of the momentum indicators are in the oversold zone, which means that the market is light and there is good amount of shorts in the system. So what really happens is that this does not let the markets fall down or collapse in a very big way. At the same time at the upper level you will notice that there are lot of averages or lot of trend lines are putting pressure from the tops, so that does not let the market come up. So that is why the market gets stuck between an oversold thing, but yet the trend are posing a bit of resistance and that zone is what we are seeing.

Now the question comes is that if we are in a bull market then what levels do we get out of for it to really propel us to new levels and I think these levels of 4,950 or thereabouts which you spoke about, which is 100 points or so away from where we are, would be important levels. I feel that 100-150 point rally in the Nifty will bring in a lot of short covering and I feel that lot of people are sitting on high levels of cash-the commitments are low from traders, commitments are low from investors, no one is in a rush the market is not doing much and I think that money or that spurt will come in.

So beyond 4,950 in the short to medium-term in the next week or so, would propel the market higher and again get a short up tot 5,300, which was the recent high. But the key point in this whole thing is going to be the dollar strength because the Euro/Dollar equation is something where a lot is happening globally, a lot of hedge funds or lot of money is parked in this trade because from what I read it's got record short euro positions by hedge funds globally.

So in case that surprises and you have t his whole round of short covering in the euro you could see dollar weakening an that could get back into equation but in the short-term post Budget if you are talking about I think 4,950 or thereabouts will be an important level. If that gets taken out you will have much good rally, good follow ups.

Q: The one space that the market is watching for fundamental reasons, oil- how would you map the moves for some of the big guys like ONGC?

A: If you look at the oil index from macro basis you realize that it's totally skewed thanks to Reliance and ONGC and it's absolutely a dog of a chart there is. So you may say that oil sector is not looking too good. But if you pull out the three oil refinaries which is HPCL, BPCL, and IOC, I think that is a space where there is lot of interesting stuff happening, the kind of build up that you have seeing, the kind of chart patterns that you are seeing and there I would specifically like to point out IOC, the kind of patterns that you are seeing tells you that there is something more interesting.

People may expect something in the Budget which may not happen and come later so in case there is bit of knee-jerk reaction or a sell off, I think in the oil sector clearly the three oil PSUs marketing companies stand out and as and when something happens there, I think you could see a very big move.

It is very rare, in this last run up to the budget there are not lots of stocks showing good charts or heavy build ups etc these three are standing out, so this is something which I will definitely keep an eye on.