Bear market not to lossen grip on stocks: Sajiv Dhawan

Sajiv Dhawan, MD, JV Capital Services, expresses his views on market in a chat with ET Now.

You are a unique combination, I know you look at technicals, F&O, fundamentals but you are a bottom-line person, which is, if it is going up, it is going up, it is going down, it is going down, so what happens in the beginning, do we get a 50-60 point gap down? If I was your client, what would you tell me?

You will get the gap down. After that you think the markets are very strong because they close that way and I am talking about somebody who has already got his money involved, not somebody who is watching and saying, yes may be I will make a decision. I am talking about people who have already put their money up and perhaps are long and those who are short?

Well, if you are a dissident trader, then you have no choice probably in the morning but probably trim some of those positions. Yes, you are likely to have a 50 point, 70 point sort of gap down on the Nifty. That does not really leave, much choice for most investors or traders first thing. A lot of people have been expecting this news but timing of it has obviously come as a bit of a surprise but it was going to come at some stage.

We anticipate that a few months down the line, you will certainly see some short selling in real estate stocks. You will see a knee-jerk reaction in banking stocks and also may be some selling in auto stocks but the reality is that people have had a decent run-up over the last few weeks and as I said, if you have got those positions, you will look to take the profits.

You wait for the markets to stabilise again, might be today, might be over the next couple of days as this news is digested and you do have slightly negative Asian cues but I do not see aggressive short selling coming in just yet.

The bears want to have enough of an opportunity with just a 70 point gap down and the bulls, HNIs, etc. I do not think they are going to loosen their grip on the stocks, which they have driven up over the last couple of weeks just for this one piece of news.