Mr. Mustafa Nadeem, CEO, Epic Research
It's a bear momentum we are in and that particular momentum when is seen in a long-term bullish trend every reversal with a bullish sentiment is played in favor of bulls. But there was no confirmation technically that this pullback may last long. The reasons that can be contributed are many.
Globally markets weren't making new highs while Asian markets such as Nikkei, STI and other important indices were as well struggling. So this was a major part that came in. Secondly, there is multiple divergences in most of the indices. You can see SP500 for being globally tracked. HSI and STI are already in a bear grip. And we have seen that effect in Nifty already from 11700 to 10300. Now with a rebound, there is a sentiment that kicks in that if it can be bottom. We clearly pointed to avoid bottom fishing last time as it's like catching a falling knife and it is not something retailers can do until backed up by a deep pocket.
Derivatives data did suggest that the range for Nifty is 10400 - 10500 Max on the upside and 10100 on the downside and it could be uglier with that big a range. And Bottom fishing would have been much riskier.
Thirdly the internal strength of the market is not supporting the overall index since we have blue-chips that are suffering except few that is a kind of a managed play. We expect Nifty to retest 10100 - 10000 mark. If not exactly but in that range we may take a next call.