Nifty target at 5500 on breakout above 5100: Daryl Guppy

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Nifty target at 5500 on breakout above 5100: Daryl Guppy

Positive on Wipro, State Bank of India, Tata Motors, Tata Steel and Infosys, Daryl Guppy, Founder and Director of guppytraders.com, believes that the S&P 500 has immediate resistance at 1,160. "The dollar index is headed lower and I see support at 71." Guppy has a Nifty target at 5,500 on a breakout above 5,100.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 10/02/12 Are Mutual Funds betting on Nifty? Other Stocks in this news State Bank of India | Tata Motors | Tata Steel | Infosys |

Positive on Wipro , State Bank of India , Tata Motors , Tata Steel and Infosys , Daryl Guppy, Founder and Director of guppytraders.com, believes that the S&P 500 has immediate resistance at 1,160. "The dollar index is headed lower and I see support at 71." Guppy has a Nifty target at 5,500 on a breakout above 5,100. He feels the Shanghai Index can go up to 4,400 by February and has a long-term target for Dow at 11,600 and a gold target at USD 1,160 per ounce and USD 1,214 per ounce.

Here is a verbatim transcript of the exclusive interview with Daryl Guppy on CNBC-TV18. Also watch the accompanying video.

Q: We just heard one expert saying this listless phase will probably last just a week or so, what are you seeing on the Nifty's charts now?

A: What we are looking at is a breakout of strong rally, which would take us a bit by surprise from a technical perspective. So what we need to do at the moment is to buy strength and sell into strength as well.

Q: The S&P is back above 1,100, where is it going next you think?

A: S&P has a target around 1,100 and 1,160 at this stage. So it is a relatively close target to a strong resistance level. How the market moves towards that resistance level and reacts is most important. So we still have rallying strength but we don't yet have proof of trend strength.

Q: All moves in this part of the world are inversely correlated to the dollar nowadays. Are you sensing any directional move in the Dollar Index?

A: Dollar Index certainly has one direction at the moment and that is fairly strongly downwards. In terms of the dollar index, we are looking to support at 71. The problem with 71 on a Dollar Index is that it is only being tested once. It is not a proven support level. So there is still the possibility that the Dollar Index can fall below 71.

So it is a little bit of concern at this stage. But for inverse correlation, it is quite good because other markets are going up as a result.

Q: It has been circling the 75-mark for a while though. If it does break it, you would say the next immediate support is all the way down to 71 because that would imply a really big move in emerging markets?

A: This is true and it doesn't mean it is going to happen very rapidly. The Dollar Index has been in a sustained downtrend for quite a while and you see it is best on a monthly chart. If you go to my CNBC blog, there is much more detail about why 71 is the target level.

Q: What do you see on some of the heavyweights for our own market - a Reliance for instance or some of the banking stocks?

A: The key factor at the moment is to buy into trend strength. So stocks like Wipro for instance have a very strong uptrend - support is around Rs 530. There is no upside target. Something like State Bank of India (SBI). The rally rebound has developed quite strongly but it has resistance around Rs 2,550. Tata Motors has a very strong uptrend target immediately around Rs 750-800. Tata Steel also a good trend - target Rs 650-700. Infosys - a good breakout, once it moves above Rs 2,400. No to set upside targets in too many of these stocks - we need to simply ride the strong trend and the rally that is driving them.

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