| In a CNBC-TV18's special show Investor Camp, Suri says, "If it comes in favour then I think we will breakout of the 5,170-5,200 range and give a 10% upmove. In case there is disappointment, we can drift down to 4,700. In case 4,700 breaks then 4,100-4,200 may become a reality."There is an European Central Bank meeting on October 26. There is an expectation of a package to rescue toxic debt in Europe. Trader Atul Suri says, the markets are expecting favourable solution. |
However, he has a slight bias to an upside breakout by virtue of the global markets performance. He explains, global markets do not want to go down inspite of bad news. And that, according to Suri, is good news in itself.
He says, in case the Nifty breaks out the 5,170-5,200 range, it can rally to 5,600.
In case the market breaks out on the upside, he expects auto sector to outperform. "Auto sector will be an interesting play."
According to Suri, any big upmove is not possible without the participation of banking. "I think private sector banks are important."
He expects FMGC stocks to move to new highs, if the market moves up.
Below is the edited transcript of his interview on CNBC-TV18. Also watch the accompanying videos.
Q: What is your call on the market now?
A: We have been into the liquid oxygen stage of 4,720 and 5,170. But let me explain why it is so important and what the implication of this thing is.
Let's look at a little bigger picture. The recent high of 6,338 was touched on Diwali day. I think it was November 2010. After that, if you see progressively then this market has been not making new highs. We have been making lower-tops and lower-bottom.
For six-nine months market use to come to 5,200 then bounce back. 5,200 became an important support for this market over six-nine months. When 6,200 broke, somewhere in August or July of this year, it was a triangle formation breakdown.
The projection given by me and many other analysts was around 4,100-4,200 on the Nifty. The Nifty went down to 4,700, which is a recent bottom. So, if this target of 4,100-4,200 would have come then it would have been a problematic level.
The market has to continue making lower-bottoms and lower-tops, which is a nature of any down market. But in the last few weeks or months, the market is not breaking 4,700, in fact it has made a slightly what we term, in technical terms, a higher bottoms. This shows that inspite of all the bad news whether it's inflation, whether it's RBI, whether it's euro crises, the market does not want to go down.
Has 4,700 become a base? To become the base for the market, it has to go up. The market has to take out its previous top of 5,170-5,200. That's why this level is so important. This has become a range.
Interestingly, this has happened through all the global markets. If you say the problem is in Europe, the big player out there is Germany whose index is DAX, even the DAX has rallied 10-12%. And that has also broken out on the upper band.
If you see Dow's Friday close, it was 11,800, which is out of a three month range. So, inspite of all the bearish and negative talk, interestingly global markets are saying something else. Infact global markets are pointing towards upside breakdown.
It has not come in India yet. I think we don't have to wait for too long for this to come because in the coming week there are three-four important events. The most important event is ECB's meeting, in which there is an expectation of a package to rescue toxic debt in Europe.
The markets are expecting favourable solution. If this comes in favour then I think we will breakout of the 5,170-5,200 range and give a 10% upmove. This will not only happen in India, this will be part of a global upmove.
In case there is disappointment, we can drift down to 4,700. In case 4,700 breaks then 4,100-4,200 may become a reality. So, we are at a very important part of a range. We are at the upper end.
We have a very big event—the ECB meet. I have a slight bias to an upside breakout by virtue of the global markets performance. If you see Dow, DAX, FTSE or a lot of other markets, they have had good 10-15% pullback. They do not want to go down inspite of bad news. That is the good news in itself. Only China has not rallied.
In case we breakout of this 5,170-5,200 range, we can rally to 5,600. Is it a start of a bull market? I don't know. I will still have my doubts. There is no need to talk about big bull or bear market.
You may have 10% moves if you are able to capture it, great. If you are an investor, it is all the art of picking the right stocks. Broad market is not going to reward you. If you see in each sector, there is a function of divergent performances.
If you see auto sector, you will find that some stocks are at new highs, whereas some auto stocks are suffering. See in banks; private sector banks are doing well, PSUs are not doing well. So, there is a divergence seen in each sector.
If you are an investor, just hope that you are a good stock picker. If you are a trader, hopefully try to play for next 10%. That is broadly what the market is. It is absolutely exhausting, it is exhausting financially, it is exhausting mentally, but that is reality. That's our job to look at it as it is rather than as we dream it should be.
