Munesh Khanna of Anagram Stock Broking feels that the market will stay above the 5000 mark but not go up much further this May. He said that a study conducted by Anagram showed that for the past 18 to 20 years May has been a negative month. He also added that  25% of the stocks gave around 50% returns. He further said that the market had gone up 12% in the last three months and looking at the advancement of the market from it’s low he is does not think this May will be negative month for the market.  Given all these factors Khannna feels that the Nifty will stay at around the 5000 to 5080 levels.

Excerpts from CNBC-TV18’s exclusive interview with Munesh Khanna:

Q: April has been a constructive month, do you see May continuing the good work of April or are you apprehensive?

A: Let us look at the backdrop here - what we have had is Sensex maybe about 14% above the lows of March; we have had 25% of the stocks which have returned more than 50%, we have had about 75% of the stocks which have returned more than 25% of their lows. We have had something like 90% of the stocks, which have beaten the Sensex. I think just looking at this backdrop as to how much we have advanced in April - we look at May. One does tend to feel that little bit of steam will run out and historically we were looking at some statistics.

For eighteen years or twenty years we have had May as a negative month. Let us not forget we have still got memories of 2004 and 2006 around and for the past eighteen years we have had negative returns in the month of May. So given all of that and given how much we have advanced from lows we just believe that at these levels the Nifty is not really going to go much beyond where we are 5,050-5,080. So one would look at lightening the commitments and that is how as an organization we would be advising our clients.

Q: Do you think the market will go back to the lower end of the trading range from where it bounced off or that is a remote possibility in May going back to those 4,500-4,600 levels?

A: I think that would be a remote possibility. One does not see too much upside right now immediately purely because there has been a lot of steam in the upfront but I do not think one is very negative. But yes the advise would be to be light on commitments watch the market and it is an unsure market at this time it could move either way so the best is that to have lighter commitments.

Q: Would you buy anything from these two commodities - steel or sugar?

A: I think steel right now one is wary about and sugar I think some value picks are still out there. Again a lot what happens to sugar is the way the whole commodity cycle goes. I think one will have to look at what is happening worldwide; also what really happens in the Fed meeting - how far will they cut rates further because this is the last of the rate cuts. Our view is that there would be slight dollar strengthening and right now the commodity prices as we see, a lot of it has been fueled by the fact that we have got a very weak dollar. And therefore, a lot of what happens on the commodity prices and the commodity stocks would also depend on how the dollar reacts over the next couple of weeks.

But sugar is one sector, which does look there are value picks out there.

Disclosures:

It is safe to assume that my clients & I may have an interest in the stocks/sectors discussed.