The F&O expiry is expected to close with a whimper. For many, the April series may have been slightly disappointing to say the least. But investors can take heart that the market has been able to stay adrift in this range. The market attempted rallies past 5,400 a couple of times, but it never quite got there. So the bulls or bears won’t take away much.
Anil Manghnani of Modern Shares & Stock Brokers finds it a little disappointing that after going above the trend line at 5,300 the market has came back below that. He thinks the prime reason were the volumes which were too low. “Anytime you get selling like you saw one of the funds exiting on Monday or that algo trade flash sell-off on Friday, when there is no volume to absorb in the market, it is no surprise that the Nifty gets knocked down 50 or 100 points.”
From an index point of view, probably nothing has changed over the last two months. Even last series we closed around 5,190 and net-net we haven’t done much on a month on month basis. What's happening is stocks are grinding down, says Manghnani adding that there are a handful of stocks that you can name that are much lower than what they were at 5,135 which the market hit on the last day of the March series. “Just to name a few - Larsen, ICICI Bank, Lanco and Infosys all of them have actually gone and made a new corrected low in this lets say from 5,630- 5,135 – what they did in March, they have gone and broken those lows in April.”
So maybe the index is not grinding down but stocks seems to be grinding down. Strictly from a trade perspective, 5,180 seem to be a crucial level where the market keeps bouncing back. From a day perspective that will be a key level to watch. From a trend perspective, I still think last month lows of 5,135 and the major support of 5,080 which is the 50% of 5,630 and 4,530, until that doesn’t break from a Nifty point of view, the market is still holding up but like I said earlier I think stocks, many of them sure have broken down.
If traders are looking at trading some of those high action concept stories, Manghnani says Titan is stuck in a range now. Every time it comes closer to Rs 245-250 you see a sell-off but every time it’s back to Rs 230-225 it tends to bounce.
He finds Bata an interesting pick. “It’s at major stretched out levels, somewhere between Rs 820 and Rs 840 but if it starts to take out even consistently Rs 840 then the stock can again get another push towards Rs 900.” He is not saying go and buy it but it is one of those ones that hasn’t fallen at all even in this recent correction.
On Jubilant Foodworks, Rs 1,180-1,190 is a major technical target. If you are taking a fresh call now on Jubilant, it will have to be only on a dip or then if the stock takes out Rs 1,200, he adds.