Jai Bala, CMT at cashthechaos.com has said that he continues to remain positive on Tata Motors and Tata Motors DVR. "It is time to take profits, not the time to short. Wait for it to drop below Rs 200 and then we can look at shorting opportunities," Bala told CNBC-TV18.
According to him, the Nifty is making new highs on falling momentum which is a reason to be cautious.
"The markets new high today has come with falling momentum. That is not a good sign. The inter market divergence between the markets, if you look at the energy sector, if you look at the banking sector, IT sector, Nifty Next 50, they have not made new highs. Some of these sectors are little distance away from their all-time highs; not too far, but considerable distance. So, usually the market correction happens when such inter-sector diversion happens. So these are the reasons to be cautious at the moment," he explained.
Bala expects equities to start correcting as the US dollar index has put in a reversal signature.
"The dollar index has put a reversal signature and the probability that it has reversed -- I would put somewhere close to 90 percent. So that is a very high probability. I had warned that when the dollar index reversal signature is in place, most risk assets will start to correct. That has happened for the cryptocurrencies and precious metals. It is a matter of time before equities start to correct. So it is not yet time to go short, but it is definitely time to take money off the markets. If you want to be in the market, your trailing stop should be somewhere close to 14,220 on the Nifty," he said.
Moreover, Bala shared that he is not extremely bullish on Nifty IT, but will hold on to existing positions.
"Nifty IT seems to suggest that there is one last record high pending and the dollar strength could initially impel that one more time. However, the momentum is slowing. So I would say have an exposure, but a reduced exposure. The next resistance for Nifty IT is about 28,500-29,000. So, I would not be excessively bullish, but I would hold on to existing positions and that too partially," he said.
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