Current upswing may not scale fresh highs: Ashwani Gujral, Ashwanigujral.com

In a chat with ET Now, Ashwani Gujral, Fund Manager, Ashwanigujral.com, shares his views on the market.

ET Now: It has gotten above 7400, and you have been sounding a note of caution regarding the rally thus far. What is your view going forward?

Ashwani Gujral: I would advise caution because I feel that it is an upswing which may not go to fresh highs. Had that been the case, the futures would have traded in a premium which would show that people were bullish, that they are taking long positions.

So far, it does not seem like that. Even on midcaps, Nifty Junior is not up by even 1%. Therefore, I am of the view that it may not mean the real thing. I think we could still have this 7100-7500 type of range. The Bank Nifty too has not participated at all. In fact, the discount today is larger than it was yesterday.

It often happens that once the market starts moving higher, positions build up and futures trade with a premium. But in this case, it appears that at higher levels, probably longs are booking out their positions because there was nothing wrong with the policy, which turned out to be a non-event.

At least we should have closed on a positive note. With IT and banks both closing negative, if you take the 5% of the metals off, there is very little that is taking the market higher. A narrow market could be a problem going ahead. People should take this into consideration that the banks have fallen off way too earlier for the good of the market.