See Sensex at 19k if it crosses 17450: Ray Barros

Ray Barros, CEO, Ray Barros Trading Group, sees the markets rallying in the short-term. He told CNBC-TV18 that the Sensex can hit 19,000 if it breaches 17,450. "We see 17,450 and 5,200 as key resistance zones for the Sensex and Nifty." However, he does not see the Nifty above 5,200 for a while.

Here is a verbatim transcript of the exclusive interview with Ray Barros on CNBC-TV18. Also watch the accompanying video.

Q: Can you start with the Nifty and the Sensex if you look at it and if you can then correlate it to perhaps the Shanghai index because it looks like we are doing exactly what the Chinese index has been doing for the last five years?

A: The key question now for me on the US markets is the January effect. We had a close below the December close as far as the US markets are concerned. What then occurred was and normally would happen is that the market would have a 10-17% sell off from the highs and that takes as far as the US markets are concerned to about 981 to 1,000 basis the S&P contract.

And if that’s the case that should take place around the end of march and early April. So we would expect a rally in the short term and I would be looking for a rally as far as the Sensex is concerned. But it would only be a short term rally and I need to put that into context.

Let’s have a look at the actual levels. For me, the key level on the Sensex is going to be probably around the 19,000 mark. If we can get and break through these levels here on my charts, it would come to about 17,450 is the high and markets came down and then we rallied back up again. If we take out that high at 17,450 then we will be going on to about the 19,000 mark. And then I think it will turn back down, and I think that is the situation.

As far as the Nifty is concerned we have these critical levels at 5,200. We are at about 4,900-5,000 and I think we will take those out and I think we will get to about 5,100-5,200 and again from there I think we are going to turn.

In terms of the Chinese markets that is probably to me the most difficult of all the markets simply because it is being driven not so much by technicals but by fundamentals. What’s happening here is that the government is concerned about inflation they then give signs to the market that they are going to pull back this extra liquidity.

And whenever that happens the market tanks and then the government seems to lose its nerve and it gives signs to the market that they are not going to do this and the market starts to rally.

So for me the key levels on the Shanghai Index is around 3,000. If we slip below that, I think we are going to go down to about 2,600-2,500 mark. On the upside, we need to take out the 3,500 level for me to turn bullish.