Bull mkt intact; but see 1-1.5 months correction: Jai Bala

Senthil: You have been telling us that we are in for a sharp correction before we really move forward. Were you surprised by the move to 30,000 and is that the top that we are seeing for a long time now?

A: It is not a surprise. In fact if you recall from our conversations in the middle of the Russian crisis where I said the markets were found to set record highs and these were exactly panning out as you were expecting and in fact eerily the level of 9119 on the Nifty is just three points over perfect extension for the Nifty. So, the markets is ideally placed for a very sharp correction.

Senthil: So has the correction started this morning.

A: If market close negatively today it is the start of a correction. I have been saying in the last couple of days that you should start lightening up your position that you have been long since February last year and you should be raising some amount of cash and if you are not able to short that is fine but the bull market is still intact. This correction will be a large one but it will be a long drawn one probably of one or one and half months.

Anuj: The bank Nifty is at a real risk of making a lower top this time around. Do you see significant selling pressure for Bank Nifty and significant correction from here on?

A: I see what you are saying but that will drag Bank Nifty into a larger correction in line with Nifty but I wouldn’t be too worried about it from a longer term perspective. We still have more highs to come through but the next four to six weeks probably even eight weeks it will look at bit shaky but it is a welcome move and if does come through like I am anticipating it will be taking out the froth in the market.