Market’s trajectory fairly clear on downside: Ashwani Gujral

In a chat with ET Now, Ashwani Gujral, Fund Manager of ashwanigujral.com shares his view on the market.

ET Now: What should one do in a scenario like this? Does one trade aggressively on the index?

Ashwani Gujral: On a technical basis, we have a range of 5000 to 6000 levels. Had this been 5100 levels, I would have bought calls expecting tapering to be construed. The perception is more important than the news.

There are chances that we will finally head down that is clearly indicated by the momentum and market breadth. We are keeping ourselves amused by these events. The trajectory of the market is fairly clear on the downside.

ET Now: How would you position yourself ahead of the event? What will is the base case scenario?

Ashwani Gujral: If there is no good news, then we probably open flat and slowly start moving lower. If there is good news, then we might see a 50-100 point gap up and then people can start selling into the gap. Today, closing at the highs does not mean much because it is within that range of 5800 to 5950 levels.

Unless we come out of this range, it is not possible to conclude that the market has broken out. You have to be careful of range breakouts above 5960-6000 zones. Whenever you have taken those breakouts, there are chances are that they have failed and the market has reversed all the way down.

By virtue of being at these levels, it is very difficult to trust that upside because the market has reversed many times before from the same levels. Unless the context of the market is changing, it would not be so easy to move up from here.