Nifty has been hovering around the 24,200 level now for the third trading session. Does it seem like a resistance here?Rohit Srivastava: We are closer to support than resistance because after the big gap up we saw on Monday, we have sort of held above that. We gapped up above 23,960 all the way to 24,100 odd. And as long as we are not going significantly below 24,100, 24,050, I think the case remains that the market should probably be heading higher and higher meaning towards maybe 27,700 at least if not a little more than that, so that is the bias over here, slightly positive, waiting for the Nifty to consolidate a bit after the big jump up and then continue on the way higher from here.
But within this time of consolidation, would you advise any sectors that you are looking out right now where you can advise for accumulation at current juncture?Rohit Srivastava: So, I am only calling this a bounce, bounce within what is likely to be a larger degree decline in market. So, we are looking at a countertrend rally which will go somewhere maybe 500, 700, 1000 points up and then peter out and start rolling over again, so that is the overall outlook. Now, usually in these kind of bounces some sectors may do better than others. It is very-very hard to pick and choose.
So, I really do not want to put a particular bias on a certain sector. I mean, like you are seeing pharma which is a typical defence falling today. I am not sure whether that kind of thing will happen. Like, for example, banking is a sector that is broadly held up. But how much upside is there beyond this because it is already at the top end of its broad range. So, it will be very hard to pick which one should really outperform in this. To some extent, we may want to think it because it is linked to global markets. But if I look at the behaviour of the Nasdaq over the last four-five days, it is actually an underperformer with the Dow actually doing better than the Nasdaq. So, the sector pick is going to be difficult in what is a counter trend move because of the rotation, something that does well today probably does not do well tomorrow. So, we are generally just sticking with the index as the main trade over here.But any stock that you would like to call out at this time? Any stock picks by you?Rohit Srivastava: No, we do not in any case recommend any stocks because we are not really advisors, so our views are typically on the index, markets, and global linkages. And right now, there are a lot of divergences. If we actually try to make global linkages with what is happening on the dollar or what is happening in commodities, like I do usually like metal stocks but we are not getting a clear clue there because the dollar still remains strong. Even if it pulls back a little bit, you might still see further upside in the dollar so that is like a hanging sword in the commodity space and the metal space. So, even those linkages are slightly hard to draw right now. And a lot of these divergences usually happen when you are at an important inflection or turning point in the market, so I think that is the bigger clue that we are getting from these divergences, that something is changing and therefore we need to pay attention and also stay on guard and not get sucked into something completely wrong.
