Worst over for rupee; Sensex should hold 19K: Darashaw

Regan Homavazir, associate VP-Technical Research at Darashaw feels that the market will return to normalcy if the Sensex continued its pullback beyond 19,200 levels till the end of September. If it doesn't, then the downside may extend its fall till 17,100. He told CNBC-TV18 that the rupee has seen its worst fall at 68.80/USD levels and will stabilise between 64 and 62/USD level.

Also read: Dr Rajan, try convincing us that rupee is worth holding Below is the edited transcript of his interview to CNBC-TV18. Q: It has been a couple of good days, barring what we saw on Tuesday. The market has pulled back from that 5,200 level. How are the charts looking now on the Nifty? A: The close that we had in August has led to some concerns emerging on the long-term charts. So, while we look at one trend following indicator, which is extremely important as far as the past is concerned, has registered a sell. The Sensex needs to follow that soon so 19,200 on the Sensex is very important to get pass. Should we not do that, we are going to extend the downside to at least a retest of 17,100. It means 5,100 will be likely in that eventuality. But if you start trading above it (19,200) and you do trade above it in September end, it means that everything will be back to normal. You are looking at things again moving up. So, that is how the charts are currently positioned. Q: Would you be looking at any levels in the Bank Nifty? A: Yes, the Bank Nifty has broken down long-term significantly. So we are talking about 9,200 as being a very important level. You need to get pass that to start talking about 10,000. So, 9,200 is a very significant price point for the Bank Nifty to keep trading above. Should you not do that then you are again talking about Bank Nifty going down. Recent move suggests that the Bank Nifty is heavily oversold. So, we are talking about the banks crashing nearly about 30-35 percent, frontline banks doing that so there is a pullback possibility all the time. You are witnessing that. So, while you are witnessing that the extent of the upside currently as it seems is 10,000. Q: You track currency closely and today we have seen a bit of an improvement there. What could be the floor for the currency now? Do you think that the levels that we saw of 68.80/USD last Thursday or on the August 28 was the worst we have seen chartically at least? A: Yes, that seems to be the worse because we have an internal update that got released stating that we are expecting 64/USD and lower. So, we are expecting the currency to settle somewhere between 64/USD and 62.5/USD.