Indian markets will underperform global peers: Ashwani Gujral
September, 19th 2011
Ashwani Gujral, Chief Market Strategist, ashwanigujral.com in an interview with ET Now talks about his outlook for the market.
What are your thoughts on markets for this week?
We have been seeing stability for the last 15-20 sessions. Now what is important here is that the last 3 weekly closes have been within 1% of each other which means that basically all jumping around is not leading you higher on a weekly basis.
On the daily chart, the kind of pattern we are forming is something that is called a 2B pattern which means that 2 tops are going to be made in a relative vicinity and then the market would start declining once more. Maybe that has already happened.
What I am looking for is a downside trigger where I can reinitiate my shorts. Probably I would not short if we open with a 60-point gap but that low early morning will give me that trigger. In case that gets violated, then next time around you would try to short this market but it is not going beyond 5150. Our RBI is not bothered about the market going up or down.
So maybe we will underperform global markets because our rates are going up even if there is QE3 or something happens tomorrow, that is pretty much discounted. So there is no point looking on the upside because this is not an uptrending market where you should play for breakouts.
In a market that is basically in a medium term downtrend, you need to look for topping patterns to get short back again. For the day, we need to maintain 5098 to be positive. On the downside, you will see support at 5023-5053. Bank Nifty again it has rallied all the way back into a resistance zone and now from here, you need to watch what is a good point to get short.
Generally a previous day's low works very well and that should be kept in mind as a selling stop loss. So we need to stay above 9702 to be positive. CNX IT we need to maintain above 5530 for a positive view. This is the index which has not really rallied. It is just basically sideways. We saw couple of days' worth of rally.
Now weekly pivots on Nifty are 5046, Bank Nifty 9592 and CNX IT 5417. Generally the weekly pivots are more relevant and once they get broken, that is a fair signal that if the market starts closing below them, that short positions can be taken as a thumb rule.