CNX IT gives sell signal on charts; Nifty may head towards 7,950: Ashwani Gujral

In a chat with ET Now, Ashwani Gujral, Fund Manager, Ashwanigujral.com, shares his view on how the trade may pan out going ahead.

ET Now: How would you approach trade on Thursday?

Ashwani Gujral: While Nifty is holding on to 8,100, the rallies are becoming shallower. For example, on Wednesday the index could not even cross 8,150. So if this continues, at some point, the demand at 8,100 is likely to give way. There have been some indications as well.

The CNX IT index has given a sell signal. Banks are kind of nowhere getting ready for a large move. It is very difficult to see how the market can move higher. In such a scenario, we have taken short positions on Wednesday - both on stock futures and indices.

The idea here is that we should get some sort of a downside may be towards 7,950 initially. That sort of view is now taking shape. Given that option calls are fairly low, buying November 8,000 puts may not be such a bad idea because slowly the buying seems to be getting shallower.