Nifty50 finds a key support level at 11,800 and "this is an uptrend but it is a very weak uptrend", Jai Bala of Cashthechaos.com. The market came tantalisingly close to the support level, but managed to hold above it. Therefore, the investors should not be taking portfolio positions, should take trading-only positions, he said.
The market clocked new all-time highs twice, but it has behaved like it has clocked fresh intra-day highs and that is the strength of the market, Bala in an inverview told CNBC-TV18. Nifty went above the previous all-time high by 50 points and found it easier to drop to 11,800.
Bala said: "From a short-term perspective as long as the market stays above 11,800 the uptrend needs to be respected."
He further added, "The stronger stocks like the Bajaj twins, which are in a very strong uptrend from 2015 are slowly slipping. I would say Bajaj Finance has probably slipped into the bad camp. Bajaj Finserv is the only one which is 50-50, the next new high might be a high that may not sustain. So, the markets are in the hands of a very few stocks like Reliance, ICICI Bank and Kotak Mahindra Bank. Therefore, the markets are getting narrower and narrower. So, we need to be careful and wear a trader's hat and not an investor's hat."
"I had mentioned in September that this market from September you need to be participating in it but you should be taking a view as a trader and not as an investor and that market has done exactly that."
He said that Tata Motors' recent rally has possibly got something to do with Brexit. "From an extreme short term perspective I think the rally remains incomplete. It can go somewhere between Rs 225-250 in the short term to medium term potential for Tata Motors. I would still treat it as a sizeable bounce that is correcting a longer term uptrend but I would not yet venture into saying that this is a turnaround for the stock."
On ICICI Bank and State Bank of India, he said, "Between ICICI Bank and State Bank of India, it is ICICI Bank which is in a very strong uptrend but be very mindful because if the stock were to break Rs 505 then there is a big potential that it is breaking the uptrend. So far it doesn't look like that, it looks like it is going to continue to somewhere close to Rs 550-560, so it is very late in the uptrend but it just still looks like there is some more steam left in the stock."
However, the risks are quite high for the stock (ICICI Bank), so Rs 505 is very critical. If the stock comes below that, there is a good chance that the stock falls down further.
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