Markets may correct post 16,000 levels: Mehul Kothari

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Indian markets started Friday’s session with minor cuts but extended the fall amid heightened volatility. The Sensex was down 163 points or 0.31% at 52405.94, and the Nifty was down 38.40 points or 0.24% at 15689.50 at 10 am.

Mehul Kothari of Anand Rathi spoke to Money9 and said, “Markets have been in the over-heated space for some time. This correction will throw the weak hands off, however I don’t see the Nifty falling below 15,600 in the near term as this is a very strong support. If the supports are sustained one can still hope to see 16,000.”

The Nifty Bank also he believes is stuck in a range. The bigger participation from the financials will start coming in when the resistance of 35,800 is taken out. One can still buy on supports and sell on resistance as far as short term traders.

In the next leg of the rally he believes the private banks will outperform in Nifty Bank.

He cautions, “One must take note of the fact that the retail participation in stock futures is unusually high. Around 10 lakh contracts are still long which is huge. This indicates over-optimism. This should be seen as a sign of caution. We do see a sharp correction in markets post 16,000 and not immediately.”

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