Use this rally for selling; do not buy: Modern Shares

Excerpts from CNBC-TV18's exclusive interview with Neppolian Pillai:

Q: 5,000 is the level we held. What do you think the market will do today?

A: As a house we believe we are moving up as a pullback rally within a large downtrend. So for me the upside could be capped just about 5,135-5,175 and that is the range which I am looking for Nifty. That’s where I think the rally would peter out; it will lose steam and then probably come back closer to 4,850 levels and on successful retest of that, we can say the bottom is in place now.

According to us the bottom formation process is still on and within that we have rallied up. This rally needs to be sold into if one would have bought it at lower levels but sure not to be bought at this current level of 5,050 or something.  

Q: You have been a Ranbaxy fan but what’s looking good from Pharmaceutical stocks now?

A: As a momentum play, I think Ranbaxy would continue to look strong for us.  I think beyond Rs 510 this stock could ramp up to Rs 599, that’s what I am looking at. But as an accumulation play, we seriously like Dr Reddy’s this stock is doing what Ranbaxy did about 2 years back, it got accumulated at Rs 330 to Rs 400 level, now its broken out, Dr Reddy’s getting accumulated between Rs 520 to Rs 620 levels, any fall into the Rs 580 to Rs 550 range will be a great buy for us.

Q: Essar Oil and IFCI that’s moved more than 40% in a week?

A: Essar Oil could continue to go up beyond Rs 284 that’s resistance but beyond that it could move roughly about another Rs 60 up to Rs 348.

IFCI is a pure pullback rally, it would peter out somewhere around Rs 67 levels, I don’t think I would be touching that stock maybe on the downside. But Essar Oil is for sure one can look at beyond Rs 285 for a target of about Rs 348.      

Q: How are these commodities looking on charts sugar and fertilizers if you have got any picks there?

A: In sugar I like Triveni Engineering. It’s about Rs 115; it should go back to about Rs 130-152 level that looks good to me. But steel, I necessarily don’t like and fertilisers, the one pick can be is Chambal Fertilisers, which was down about 5% yesterday; on the fall one can look at this for a target upwards of about Rs 70.

Disclosure:

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