Rajat Bose of rajatkbose.com said that if the Nifty Futures were to break 3,818 and then 3,810, there would be a further fall and the 3,842 low for the Nifty Spot would be broken.

Bose advised people not to give a short call at current levels. "If anybody is carrying a short position, and if 3,880 to 3,810 Nifty July Futures support level gets broken, there are chances that it might actually go down to 3,765 to about 3,740. Yesterday’s rally suggested that since it is not signally a reversal, the downside may be limited from here. But as of now, the momentum seems to have suggested that the downswing momentum is still on and one should not be trying to catch a falling knife."

Excerpts from CNBC-TV18’s exclusive interview with Rajat Bose:

Q: 3,900 has been broken on the Nifty. What would you advise a Nifty trader?

A: Yesterday’s optimism has got totally butchered. I had thought that, that kind of rally and a bullish engulfing pattern at the bottom with high volumes would actually signal a reversal.

If the Nifty Futures were to break 3,818 and then 3,810, then there would be further fall and the low that was there yesterday might well be broken i.e. the 3,842 low for the Nifty Spot would be broken.

As of now, it is very difficult to give a short call at current levels. I would not advise people to do. If anybody is carrying a short position, and if 3,880 to 3,810 Nifty July Futures support level gets broken, there are chances that it might actually go down to 3,765 to about 3,740.

We need to see whether those support levels actually hold or not. Yesterday’s rally suggested that since it is not signally a reversal, the downside may be limited from here. But as of now, the momentum seems to have suggested that the downswing momentum is still on and one should not be trying to catch a falling knife.