Share Market Correction Risks are escalating

Share Market Correction Risks are escalating

“History has shown that when it is easy to play the game in one particular direction, that is when the game is about to change," says CK Narayan, Managing Director, Growth Avenues, cautioning that the easy money has been made by the bears, and that they will now have to work harder for it.

In an interview to CNBC-TV18, Narayan says even though the news flow has been mixed, the market has been focusing only on the adverse news.

Benchmark indices fell nearly 10% after hitting record highs early last month. Slower than expected recovery in the economy, muted earnings growth, crop damage due to unseasonal rains and forecast of sub-par monsoon are some of the factors weighing on sentiment.

According to Narayan, the market has not been respecting any support levels. The next major support level for the Nifty is 8000. But, there is no saying if it will hold.

He says it is a good time to start accumulating quality stocks that have corrected 15-20 percent or more from their recent highs.

He also says," One will have to be prepared for another 100-point gyration in the market".

It is when the market stops reacting to bad news that the market may be close to bottoming out, he says.

Narayan says some sectors already are showing resistance to go down further. For instance, metal stocks and PSU banks have fared better than other sectors over the last few trading sessions.

Narayan is bullish on Tata Steel and SAIL, and says both stocks are looking good on the charts.