If Nifty goes below 17,250, the correction can get deeper; better raise some cash: Jai Bala

"Unless one can diversify into forex and other non-equities related assets, one is better off raising cash across the board," says Jai Bala, Chief Market Technician, Cashthechaos.com

What has been your reading on the Nifty charts? While we have fallen 5% from the top, does it seem the market is in a hurry to deepen the fall?
Yes, the markets are in the right place to bounce and I feel there is one last leg pending for this market to complete its move from the March 20 low. So I do not think the markets are likely to get any deeper beyond today’s low. We want to see the market take out immediate extreme short term risks from current levels, but if the market were to break any levels below 17,250, the correction can get deeper. At the moment, I am not envisaging that but if it does that we should be prepared for a deeper correction.

Which is the weakest hand to you right now in terms of sectors?
Obviously the banks. ICICI Bank is a shade weak but on a day to day basis it is slightly stronger compared to HDFC Bank and Axis Bank. Banking sector is a clear avoid for the moment.

What do you have to say about financials like Bajaj twins Bajaj Finance as well as Finserv? They have fallen about 6% currently. Also ever since the announcement of the Reliance- Aramco deal falling through, the Reliance stock is cracking quite hard. Is this a reaction to the deal falling off or is it more to do with the overall market correction?
Reliance was anyway due for a drop to Rs 2,350 ballpark and it is doing that. Combined with the banking index, financials are again to be avoided. In the longer term, Bajaj twins are quite strong but for the moment they have completed a cycle move from significant lows and made a significant top. So one can see a sizable correction come through for Bajaj twins but it is just a correction within a larger upfront.

It is only Bharti amongst the largecaps which has proved to be resilient in Monday’s fall and Vedanta to some degree. Would there be any hiding place?
Raising further cash would make more sense. Hiding places are likely to be among some of the cash stocks within the non-Nifty space or midcap space. But for a retail investor, it is going to be difficult to identify and they are going to be into trading bets. So unless you are a trader, you better raise cash.

Across the board?
Yes, unless you can diversify into forex and other non-equities related assets. I think it is better off raising cash across the board.