Markets are extremely oversold and should bounce back, going by the textbooks of technical analysis. But Marathon Trends Advisory's Atul Suri said no “model” covered today's moves.
“Tops and bottoms are mythical numbers, nobody knows when it will happen, the important part is risk-adjusted returns,” the chief executive officer at the portfolio manager told BloombergQuint in an interview. Wait for three days of stability before deploying fresh cash as trying to pick the bottom during this level of volatility is “pretty dicey”, he said.
This comes as India's equity benchmarks posted their worst decline since August 2015 as the number of coronavirus cases continues to rise and Brent crude tumbled. That led to a surge in volatility in the financial market. The India VIX is at a 10-month high.
I'd rather be safe than sorry in such scenarios, because in such times cash is king.Atul Suri, CEO, Marathon Trends Advisory
Still, Suri thinks that the performance of banking stocks could be a turning point for the Indian market. Bank Nifty is the lead indicator for domestic equities due to high weightage of banks in the benchmark indices, he said, adding he was watching HDFC Bank Ltd. closely.
Here are the other key takeaways from the interview:
- Witnessing selling pressure across asset classes, interplay at work
- Fund flows are determining what the market is doing
- Crude selloff is an incremental pressure point on the market structure
- Seeing liquidation and unwinding of positions; there's no respect for price on days like this
- Trying to pick the bottom amid this level of volatility is dicey
- Markets should not make a lower-low at least for three days before deploying fresh cash
- HDFC Bank is a bellwether stock for private banking
- HDFC Bank is the most central overweight play in the index today
- U.S. treasuries are in a free-fall mode, extremely oversold
- As the line goes, tops and bottoms are for fools and liars, please don't try to catch the bottom
Watch the full interview with Atul Suri:
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
