Mkt will not go below 5,050 levels: Ashwani Gujral

Technical Analyst Ashwani Gujral said mostly people are bearish about markets. He expects market to momentarily cross the range, but it won't go below 5,050 levels, he said.

Excerpts from CNBC-TV18's exclusive interview with Ashwani Gujral:

Q: How are you trading the Nifty now? It’s seems to have just paused a bit last couple of days?

A: I think Nifty could consolidate between 5,050-5,250 but if one has an indicator which could tell how many analysts are bullish; I think still eight out of ten are bearish. So that probably gives the felling that there is more upside. The 5,400-5,500 level is so well advertised that I would even bet that the market momentarily crosses this level, traps everybody on the bullish side before it tops out; market never top out before everybody gets in.

I would bet there is still a long trade. We could probably have a week of consolidation but I don’t see this market going below 5,050 because there are key moving averages, the 50 Exponential moving average (EMA) and the 200 EMA both are placed out there. So some consolidation and then again an upmove back.    

Q: What do you make of the banks chart now? We have seen some come back in the PSU and private sector banks over the last couple of days?

A: Definitely the banks charts are going through a pullback rally because they are expecting inflation comes down and the rise in interest rates probably stops; they are still not in fresh uptrend but they are in tradable rallies and particularly banks like Indian Bank, which had the first good upmove after its entire decline that could head up to Rs 167-180, its got support around Rs 137.

UCO Bank in the smaller banks because midcap interest is coming back, confidence is back, there is support around Rs 43, resistance at Rs 54 to about Rs 65. They are at levels from where people cannot lose a lot. So they are looking for the safe bets which could easily give them 10-15-20% over the next few days.

Another bank is Allahabad Bank which got support around Rs 85-86; it can go to levels of Rs 100 and then probably Rs 115. Some of the other banks like Kotak Mahindra Bank got beaten up quite a bit could head up Rs 950 levels.

HDFC Bank consistently is showing strength that is a strongest bank in the private sector lot could head up to around Rs 1,700 levels.       

Q: Two stock Power Finance Corporation (PFC) which went up yesterday and Unitech which has been trending for the last few sessions?

A: Unitech found excellent support around Rs 240-245 which was the 200 Day moving average (DMA). I think now its getting into some sort of intermediate uptrend. It could get up to Rs 400 in case the market continues to head upwards because real estate is a high momentum stock, its got support now at Rs 295-300. So people who got around Rs 240 need to probably keep on moving their trailing stop loss up.

Regarding PFC; power is now seeing some sort of comeback after underperforming and if it can cross Rs 203, a level of Rs 242 is possible. But these stocks will still suffer from over ownership and people will sell at higher levels. So I would much rather be in midcap IT or oil and gas rather than getting back into power favourites. It’s got support around Rs 160-162

Q: Two stocks Hindustan Constructions and from midcap IT bunch i-flex Solutions was down about 5%. Would that be a buy for you and what sort of target would you set out?

A: Hindustan Constructions got support at Rs 130 and it could move to Rs 160-178. These construction and power type of stocks which were underperforming for the last couple of months they have shown moves yesterday, so it’s probably some sort of catch-up because of the level of the market.

i-flex continues to positive; sure it fell 5% yesterday but with Rs 1,250-1,275 stop loss, I think levels of Rs 1,650-1,700 are still possible, mainly because that sector is in fancy and there isn’t enough ownership and people could get interested in those stocks.     

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