Guppy believes the bounce in the Dow and the S&P was only a temporary pullback and recommends selling into the rally. He feels investors are using rallies to take profit and not going long. He expects significant selling to cap any upside in beaten-down stocks.
He estimates the support for crude at USD 32 per barrel and resistance at USD 58 per barrel. Gold may rebound to USD 1,200 per ounce levels, Guppy said.
Here is a verbatim transcript of the exclusive interview with Daryl Guppy on CNBC-TV18. Also watch the accompanying video.
Q: Is it just a dead cat bounce in the S&P and the Dow or anything more than that?
A: I would say this is very small bounce. If you look at the close on the Dow it is up 0.6% and that is nothing to be excited about.
Q: So how much more would you give it on the way up for S&P and the Dow in this pullback?
A: There is very little upside remaining in this pullback at the moment. What we are looking for is to sell into this rally, which is what most people are doing, and then for resumption of the downtrend. For the Dow, our downside target is still around 5,600.
Source : CNBC-TV18