See Nifty’s final target at 3000-3200 levels: Gujral

According to technical analyst Ashwani Gujral, the 3,600level was 50% retracement of the entire bull market. “I think a pullback could lead up to 3,760 to about 3,810 odd levels. I think the final target will be 3,000 to 3,200 on the Nifty,” he said.

Here is a verbatim transcript of the exclusive interview with Ashwani Gujral

Q: For the near-term can you play for a pullback then technically speaking?

A: The 3,600 level was 50% retracement of the entire bull market –– it sort of held for the day. I think a pullback could lead up to 3,760 to about 3,810 odd levels. But I think this would be a pause before the Titanic sinks to the seabed; I think the final target will be 3,000 to 3,200 on the Nifty.

Q: As a trader what would you do – if you were short, would you cut short positions or would you initiate any longs at 3,690?

A: There is not problem with carrying positional shorts. Short-term short should have been covered yesterday. You need to wait for this pullback to end; it will probably end around 3,760 to about 3,800 so at that point you can go in for fresh shorts. These 4-5% rallies after 40-50% kind of decline in several stocks would not help. In fact, people should use them to get out of poor-quality stocks.

Q: From what you see, is the market settling into any sort of range? Is it giving you any boundaries on either end?

A: The boundary, 3,800, got smashed yesterday when we decisively closed below it. Now, technically you open up a further range lower that was the width of the previous range around 800 points lower from 3,800. Now it remains to be seen whether we go and retest 3,800 and whether we are able to test the lower end of this band — around 3,000. But once a range breaks on the downside and a range that has survived for a bit you should expect lower levels to come in. Also the bulls have been battered so badly that even pullbacks will become difficult to sustain because people lack the conviction of holding on to positions.