Mar 15, 2012, 03.29 PM | Source: CNBC-TV18
Jai Bala, Cashthechaos.Com believes that the market is at a very important stage currently. He sees more upmove in Nifty from the current levels which will take out 5,630 levels.
Jai Bala (more)
, cashthechaos.com | Capital Expertise: Equity - Technical
However, if it fails under 5,630 then that will be very bearish. "It is going to take turn for the worse. So, at the moment you have to wait and watch ," he told CNBC-TV18.
He suggests that one should now have a very limited exposure to the market or one can stay in cash.
Below is the edited transcript of the interview. Also watch the accompanying video.
Q: How would you gauge the kind of movement you have seen in the index so far and what should the trading stance be now on the Nifty?
A: The markets are at a very important stage. If you look at it from a little bit longer time frame, there is a possibility that what we are seeing is a bullish phase in a broader bearish market. So, there is a possibility that there is one more leg up for the market from here, which will take out 5,630.
If the market fails under 5,630 then, that will be very bearish for the market. It is going to take turn for the worse. So, at the moment you have to wait and watch. You got to have a neutral or a very limited exposure to the market or stay in cash at this point in time.
Q: If the market were to turn from 5,630 or below that at what point below which would you be comfortable adding to some of your short positions?
A; From positional trading perspective, if the markets were to close below 5,630, that is going to tell me that the market is going quite deeper. I am going to look at a retracement to about 5,077 on the Nifty in two-three weeks time perspective. But, at this point in time the markets are heading closer to highs it made in the middle of February.
I suspect market is going to fail somewhere closer to 5,550-5,560 and the market are going to turn lower from here. But it doesn’t matter what I think, the market has to reiterate my view. We are waiting for the price action to confirm the view. So, we have to wait and watch for the market, you can be neutral on the market now at the moment.
Q: A lot of attention has been focused on the Bank Nifty how would you trade that?
A: The banking space is looking quite strong at this point in time; there are no visible cracks so far. YES Bank is taking out new all time high and the stop there is looking very good. You can place a stop at about Rs 360 on Yes Bank and expect the stock to move somewhere between Rs 404 to Rs 430.
If you look at the Bank Nifty itself, it is trading very close to the important resistance of about 10,800. On the bigger boys, you should be a little more cautious and you can have little bit exposure on midcap and smallcap banks.