Nifty poised for a make-or-break move post Budget 2013: Atul Suri, Trader

In a chat with ET Now, Atul Suri, Trader & Investor, shares his views on stock markets and expectations from the Union Budget 2013.

ET Now: What is happening are we in for a good day of trade?

Atul Suri: It is special day of trade.

ET Now: But are we in for a good day of trade?

Atul Suri: Hopefully.

ET Now: What are your positions before the budget, you would go long?

Atul Suri: I would not know that, no one trades for a budget day over the years. Having been in the market for so many years, doing a trade only for budget is something I have hopefully moved beyond. But the important part is that today, this is going to be an important day for the markets even from the technical point of view. The reason is that for the last 13 to 14 months, we have been in excellent uptrend. The Nifty was 4500 and went to 6100 and over the last two months, we have seen a bit of distributive kind of pattern. 5800, technically it looks like, can be a break down level. We could have formed a short term shoulder, head shoulder above that.

The market did come and closed below that a couple of days ago and has pulled back. So we are really standing at a space which could be make or break assuming we have a positive feel from the budget. The market in the short run is extremely oversold. You see on the street the kind of pessimism there is, the kind of decimation, the stocks have had, positions have been surrendered. In fact even with FIIs, you do see some shorts coming into the system. So I feel in the short term there is an extremely oversold position.

So even if the budget is slightly positive or slightly well accepted by the markets, I feel that there could be a good sharp up-move which could be a short covering rally.
However, if the budget is not well accepted and we go below this 5800 level, I have a feeling that this should, head shoulder which has really panned out would get the grip of the market and we could head to 5500.

However, the worst case scenario is 5500 because that is something 200 DMAs. Also I feel that looking at the basic Dow Theory, the last major intermediate bottom was around 5500, so I still hold the view that we are in an uptrend. I still hold the view that we will make a lifetime high. In the short run oversold markets will really get greeted very well in case we have slight positives. However, if it disappoints, we may go to below 5800.

ET Now: What do you think on the extreme sell-off that the market has witnessed of late and that clearly continues with the madcap stocks?

Atul Suri: Traditionally you see that when markets are in up-move, which they are in, at some stage people do start thinking that oh! these large big boys have moved up a lot and there is a bit of catch up. In that case, you also have an element of froth and there lot of forth has built up in the midcap space but as the case is and the numbers going to prove that year-to-date we are down just about 2% on the index but something like the midcap index is down 10%, the small cap index is down 14%, so the smash-up that has really happened in that space is large. It is also a very difficult space to trade in, it is extremely large and unless until you are not very strong bottom up, you really do not know your companies, I find that 9 out of 10 times especially the retail HNI who get in with all the tips and all the talk there is, do get thrashed around.

So that is one space I have been wary of and I continue to remain wary of simply by virtue of the mindset that goes into trading that space. It is an extremely controlled, extremely pyramided kind of place that happen unless until I feel that you are not sure about the fundamentals, you do not know about those companies, it is not bottom up, that is the space where this is going to happen again and again. At every correction, you will find that it is always a small cap and midcap which really gets that upper cut.

So it is not new, it keeps happening. Though we are in a bull market, you could be unable to trade. If you are in any of these spaces, it is just due to lack of home work.