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Don't short on gap down today: Ashwani Gujral
Published on Tue, Nov 18, 2008 at 09:37 , Updated at Tue, Nov 18, 2008 at 16:23
Source : CNBC-TV18
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Ashwani Gujral, Technical Analyst, said bear markets by their very nature make new lows. We have been down for last four days, so we might have a one day rally lurking somewhere.Thus he cautions to not go for a short in a gap down as market would be choppy today. Gujral said once 2,700-2,750 level is taken, we will head towards 2,250 and probably lower. Thus terms like retest and bottom make no sense, until we have proper evidence to show that bottom is being formed. Here is a verbatim transcript of the exclusive interview with Ashwani Gujral on CNBC-TV18. Also watch the accompanying video. Q: It seems we might have a rough start because of the way
A: Bear markets by their very nature make new lows. Having said that, we have been down for the last four days, so tactically you could have a one day rally lurking somewhere and once you get that one day sort of upside, only then you would like to short. You won’t like to short on a gap down today, because you have already had four or five days of downside, today it could again become choppy.
Q: What do you do you have got a gap down, if you were to short would you cover up around that 2,700 once and see or do you think today it will break? A: You would probably watch this struggle around 2,700. In case 2,700 goes which seems from the global cues that it might go, I think it is not such a bad idea to have your longer-term shorts in place. Q: Two more Chambal Fertilizers and Punj Lloyd? A: Chambal has support now at Rs 31 and resistance or any upside will happen only above Rs 55. Punj Lloyd tends to stop at about Rs 140-150 and seems to have resistance around Rs 220 but these are overowned groups; the infrastructure, the financials and I don’t think they will give you sustainable upside although you could trade Punj Lloyd by around Rs 150 and sell around Rs 200. Q: Where is Reliance headed? A: Rs 1,150 was the key level for us and once that is gone it should retest its previous lows of Rs 930-940. Commodities - till crude keeps falling, I think Reliance will remain under pressure and so will the market. So now you have three weak spots financials, commodities and infrastructure, which can take this market down. |
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