Mkt to be bearish in Oct; Nifty may fall beyond 5500: Angel

Shardul Kulkarni of Angel Broking, in an interview to CNBC-TV18, presents his outlook on the market for October. The broking firm is bearish on the Nifty and is likely to correct, he says.

Also read: FIIs being overweight is a risk for market: Barclays Cap Below is the edited transcript of his interview to CNBC-TV18. Q: On the basis of charts, what is the Nifty looking like for October? A: Looking at the way in which the September series has panned out, but the movement in the last four trading sessions, we are seeing that the market is likely to correct going forward. From a technical perspective, there is a clear channel pattern breakdown which we see on the daily charts of the Nifty. About 60-65 percent of the index heavyweights have already confirmed a reversal signal. So yes, we are bearish on the market, we are not bullish. We feel that the market is likely to move towards 5,500 or lower levels in October. Q: You had trading call on Jindal Steel and Power (JSPL), a sell call? A: The chart structure suggests a significant downside going forward. There is a clear trendline breakdown on the daily charts. Going forward, the stock will move lower to around Rs 225 or even lower levels over the next 8-10 trading sessions. So, we would recommend selling the October futures contract with a stop loss of Rs 250 on the upside. Sell on a bounce towards Rs 243. Q: You have a sell on Bank of Baroda (BoB). What do you think of generally Bank Nifty and BoB? A: I do have a sell on BoB. We recommend that traders can sell BoB October futures below the levels of Rs 510, the stop loss would be at Rs 526. We expect BoB to move towards Rs 470 or even lower levels. If you see the Bank Nifty chart structure, it is even weaker than most other indices. Yes, we have already seen a correction from around 11,200 to 10,100 but we feel that looking at the last three-four days as well as the overall way of structure, we are quite bearish in case of the Bank Nifty.