Holding, creating shorts not advisable: Bhamre

Siddharth Bhamre of Angel Broking spoke to CNBC-TV18 about the prevailing lull in the mood of the traders and that the sharp correction in the markets was due to the extension of the Greek polls by a month to June 17.

He also says that the fall in the rupee was purely on sentimental grounds and advises investors not to create or hold onto short positions in the market. Also watch the accompanying video.
"We are sticking to the view that fresh shorting is not advisable from current levels and it's a positional view, so it won't change with small whipsaws in market. The traders' attention is not very much involved in the markets," says Siddharth Bhamre.
"So though the market is not performing well, there is not much pain felt by the system. We believe that the market will hold on to the support levels of 4,800 or 4,850 for various reasons mentioned in our report.
Siddharth Bhamre lists the various reasons he feels that caused the market to correct and the rupee to fall.
"Firstly, this correction is mainly due to the Greece elections will be held on June 17. So it is not probable that the market will keep falling till June 17."
"Secondly, observing the currency movement in last fortnight, the euro has depreciated against dollar and so has the rupee. Now the rupee’s depreciation from 52.50 to 54.50 has happened despite crude oil prices correcting significantly, despite there being hardly any cash outflows from our system and so this clearly indicates that the depreciation is purely on sentimental grounds."
"Now when the euro is at 1.27 and 1.25 - 1.27 to the euro-dollar, there are multiple support points. So I don’t the expect rupee to also depreciate from current levels."
"At the same time," he adds, "if I technically observe the Nifty during the months of August to October 2011, the market has been in the range of 4,800 to 5,200 and the level of 4,800 was a very strong support zone. We are again near those levels. Also with the recent technical patterns of descending triangle breakout, I think that support has also come to 4,800."
"So if I combine currency, technicals and derivatives and a lot of short positions with rising implied volatility, they suggest that it is not a level where one should not hold onto or create short positions," Bhamre emphasises.
"I am not saying that there would be a significant rebound in the market, but investors have to cut shorts and that's the point which we have highlighted in our report."