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Stay out, a further crash is coming: Baliga
Ambareesh Baliga, chief operating officer of Way2Wealth joins CNBC-TV18 to give his outlook of the market today. He advises staying out of the market now. "If Nifty breaks 4700, then we could easily see it breaking another 400-500 points," he says.
He also comments on the midcap space and certain stocks.
Below is the edited transcript of the interview. Also watch the accompanying video.
Q: Do you think Nifty is going to break 4700 this time or do you expect 4800 support to hold out through the November-December series?
A: That is the most important level which we need to wait and watch out for because if you look at stocks individually, quite a few are quoting the indices at 3500 levels, not even 4200 levels. So 4700 is going to be just a psychological level, but it’s an important level to watch out for. If that is broken, then we could easily see Nifty breaking another 400-500 points. That is one of the reasons why I have been saying that for the last 10 days surely its time to stay out. This is not the time to venture out and start buying because you have individual stocks really crashing down. In just about two-three days, we see stocks crashing 20-30%. So it doesn’t really make sense putting fresh cash at this point of time because clearly, rupee is the biggest worry right now.
Q: If it gets to that 4700 level, would you recommend for clients to start buying because nine times out of ten, December has been a month of positive returns for the market, is it different this time?
A: I really don’t know whether it will be different this time because October again was different than what people thought really in the beginning. They said that it could be a bad month, but it turned out to be a decently good month. So let us not speculate as to whether it would hold at 4700 levels or not. I think we just need to wait and watch out. If you are not doing anything in the market, it is best to just wait and watch for those levels. However, if 4700 holds and we see a decent bounce back from there and it consolidates at those higher levels, only after that I will say possibly it’s time to venture out. Till then stay out.
Q: What is happening with all those consumer stories like VIP , Titan , Jubilant Foodworks ?
A: I think these are the only stocks where people are making some money as far as midcaps are concerned. The issue is that some of these stocks have marquee investors, they have those large institutional investments and even some amount of selling coming in from those quarters that can actually break the price. So people are trying to book out before those large investors try and exit.
Q: What are you telling your clients to do on this beaten midcaps, do you see them falling disproportionately more compared to large caps as they have in the last fortnight?
A: In fact in the past six-seven months, we have been telling our clients to buy selectively because whenever we have bought all those major downtick base, we have seen a decent bounce back and we have been able to sell partially at those higher levels. But over the past ten days, I have been telling my clients to stay out because looking at those situation which is quite fluid, it doesn’t make sense being brave and venturing out and buying at this point of time. We don’t know which stock is going to crack next. We are not talking of fundamentals, we are talking of the technical reasons for some of these stocks to crash. So best is to say out.
However, most of the midcaps which have crashed in the recent past two-three months are looking extremely attractive now. Although it may look good today, I will not be surprised if it will look more attractive tomorrow, so it doesn’t make sense buying right now.
Q: What did you make of the news on Pipavav and what would you tell your investors to do there?
A: I would say it is only an announcement because of which we saw that 5-6% bump up yesterday. I would decide once the money really comes in. That is the time we should take a call, not now.
Q: What about Suzlon ?
A: Suzlon anyway is more or less a dead stock as of now, and finally when the promoters themselves have sold off at Rs 25, it doesn’t make sense buying even at Rs 20-21 levels. Whatever you see could be a small bounce back of Rs 2-3. I think the bigger story is lost for now.