The Indian equity market ended the first day of June series with a bang. The Nifty ended up 114.65 points or 1.4 percent at 8433.65 while the Sensex was up 321.73 points or 1.1 percent at 27828.44.
In an interview to CNBC-TV18, Jai Bala of 1857 Advisors, says the market is likely to surge higher levels but slowly.
Bala adds, “I expect further follow through to come through on Monday or maybe a flat day on Monday and a sharp upmove on Tuesday.”
The market, according to BSE & NSE member Dipan Mehta, is eyeing the monsoon season and the RBI policy as the next trigger.
Below is the transcript of Jai Bala’s interview with CNBC-TV18's Anuj Singhal and Sonia Shenoy.
Anuj: It is a big move today on the Nifty and it is being backed by big volumes as well?
A: Yes, this is on expected lines and I don’t very often flip my view. We have been bullish on the market ever since the day the market hit 7997 and the view still continues. We expect new highs to be taken out, but it could be a slow move and as we are seeing today in line with extreme short come trends. In fact I expect further follow through to come through on Monday or maybe a flat day on Monday and a sharp upmove on Tuesday. So, one of the two will be the most like scenario. Only if that doesn’t happen we need to reassess the view but it is all within the parameters of our positive view.
Sonia: So, within the parameters of positive view. It has been tricky for the markets because everyone has been asking the question about whether the 8,000 level on the markets will hold now or not. Given that we are seeing attempts for the market to base out at that level do you reckon that the worst of the correction seems to be over?
A: That is a good point. Basically we want the market place to be uncertain about the move. When there is uncertainty it is always good for the market from a psychological perspective. And even the markets are very sure and cocky to get complacency in market. So when there is uncertainty I see that as a positive and the market is putting a good base building process and the acceleration if it does come through which we are anticipating to come through it would be very good and important resistance going forward will obviously be about 8510 to 8600. So, once the market enters that zone we should see further acceleration.
Anuj: What about the Bank Nifty, because that has again outperformed today, 300 points higher on that? Do you sense some moves towards 19,000 maybe?
A: We have price target of about 22,500-23,000 on the Bank Nifty, so 19,000 is probably an extreme short-term view. The Bank Nifty is going to lead the way higher and within the Bank Nifty we like certain Federal Bank, Axis Bank and ICICI Bank.
Sonia: A lot of traders have been short on this market at least some of them have with the kind of trend that we have seen in the last couple of days. What would your advice be to those short traders, square off immediately at this point?
A: I don’t know what is their risk perspective, but it doesn’t make that much sense to be long on a market but if they are being smart enough to get short around 8,400-8,480 mark I think they can wait for 8,510 to be taken out but that is an important resistances. So as long as 8,510 is not taken out that is an alternate view that the market could go down. However, beyond that it doesn’t make sense much sense to be short on the market.
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