See mkt testing 5400-5500 levels: Rada Advisors

In an exclusive interview with CNBC-TV18, Nitin Raheja of Rada Advisors, says that the intermittent trend looks downwards on the market. "We would see the market test levels anywhere from 5400 to 5500," he says.

With inflation and interest rates bringing corrections in most stocks, he also says that the FIIs which were driving the markets are no longer there. "The FIIs have been at sellers and hence,in the absence of any buying, every bad news is getting blown out and is taking the market downwards," he adds. Below is a verbatim transcript of Nitin Raheja's interview with CNBC-TV18's Anuj Singhal and Latha Venkatesh. Also watch the accompanying video. Q: It has undoubtedly been a bad start to the year. Do you think we are done with the correction or you think this time we can have a more severe correction? A: The market is heavy and the intermittent trend does look downwards on the market. While at 5750 level, we have been very strong support for the market, we had almost the market close above this level for about three to four times now in the last one to one and half month. However, it seems that we will be breaking that and moving downwards as such. We have been hearing about inflation, interest rates and just based on these two we have seen stocks getting corrected. We have seen banks on an average correct of anywhere from 25% to 30%. We have seen auto stocks undergoing correction. However, none of it is in a scenario where demand has really slowed down. For example, in auto sector, if you see the December numbers or when you talk to some of the auto loan companies, they are talking of very strong ground level demand happening. Essentially the market was running on institutional FII driven liquidity. Domestic funds and retail were absent in the market. From the beginning of this year, the only engine which was driving the markets, in terms of liquidity, is no longer there. The FIIs have been sellers and hence, in the absence of any buying, every bad news is getting blown out and is taking the market downwards. We would see the market test levels anywhere from 5400 to 5500. If there are any disappointments on the results, I think the market will be in the same  punishing mood as now. Q: Would you start putting your cash to work just yet? Would you start selling some of your holdings? A: Many sectors have seen a lot of a steep correction. One can start looking at selectively buying at about 100 to 150 points down the road. Q: L&T has had a one-way downtrend over last three or four days and has fallen about 15% or so. ONGC has also taken quite a bit of punishment. What is your view on both these stocks? A: We are not very negative on L&T. It finds quite a bit of support technically at these levels. In the longer term, we continue to remain very positive on L&T. The IPO overhang on ONGC is still clearly present. With oil prices being firm and the fact that there is lack of clarity on ground, the ONGC stock is facing the brunt. However, we really don