On Saturday, the Sensex ended special session up 25 points at 17,159.04 and the Nifty gained 9 points at 5,199.40.
In an interview to CNBC-TV18, Anu Jain, vice president of IIFL Private Wealth Management says, the Nifty is in a no trend zone with a slightly negative bias. According to her, 5,130-5,140 is the support level. “If they were to break, the next supports around those 5,050-5,060,” he adds.
Below is the edited transcript of her interview with CNBC-TV18's Mitali Mukherjee and Sonia Shenoy. Also watch the accompanying video.
Q: What's your view on the Nifty? How do you think we could get off to this truncated week?
A: It’s been range-bound for the whole of April with a hardly a 10-point difference between the open and close. What we have started in the May series is very similar. The bias for the Nifty is negative. It’s standing close to supports, which it has held for the last month or month-and-a-half, despite the bad news which is surrounding it. So that is giving resilience.
Having said that, I think 5,130-5,140 is where we are seeing supports. If they were to break, the next supports around those 5,050-5,060. For the short-term trend, which has been negative, if we were to hold onto 5,240-5,250, a lot of shorts would start covering up and then you may see atleast 5,300-5,320 on the charts. So, this is a short term play. But as of now it is in a no trend zone with a slightly negative bias.
Q: What's happening with the Bank Nifty, when you look at it technically because last week showed up some pressure for that index itself?
A: Bank Nifty post the 50 bps has kind of held on and then it went and tested 10,100-10,080 levels where there is support. We had ICICI coming and giving it a support on Friday where it was really needing that support. That was the first day it tried to outperform the Nifty.
Having said that, that is also in a range and 10,000-10,100 to about 10,550, 4-5% move, is where it is going on. ICICI is probably holding onto these levels which are close to its support. Axis did move up positive on Friday, it is showing support at these regions. Kotak, HDFC are looking strong, except for Yes Bank, which after bulk deal has weakened up.
On the PSU side, except for probably BoB (Bank of Baroda), SBI, which are showing some recoveries, we are not seeing strength. So, a pull up to 10,450-10,500 is possible. But for beyond that, you will really need SBI to perform, which as of now is showing only a pullback for about 2-3%. You will have to see how it performs around those 10,400-10,500 levels to feel whether it can go up.
On the downside, 9,800-9,750 is giving good support. So, about 400 points on the upside and 200 on the downside, you are right in the middle of the zone, nothing major is happening out there.
Q: Would you concur with the view that there is more selling in store in some of these infrastructure names case in point JP Associates that has been down and out for quite a while now?
A: I would look JP as more a cement play than an infrastructure play. But I think it’s essentially looking like its closer to its supports. So, if we look at the moving average along with the cement stocks, it’s corrected 15% odd which all of cement has done.
Now, at Rs 70-70.5, that’s where its 200-day moving average is and at the same time there has been a kind of a move which is indicating that probably it will hold onto this. So, there is a lot of time before it moves back to the Rs 77-78 levels. But at this level, I think even if it manages to hold onto Rs 70.50-71, you can see a Rs 74-75 move. How it handles those levels, does it gets sold back into that Rs 75 up rises? That is what I’d like to see. But I would definitely not want to short it at this time. I will probably like to see if it can hold on and move to Rs 74-75. So, a short trade for a positive bias exists.