Which banking stocks is Anu Jain bullish on?

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

Anu Jain, India Infoline, in an interview with CNBC-TV18's Mitali Mukherjee and Sonia Shenoy, spoke about her reading of the market and her outlook.

Below is a verbatim transcript of the interview. Also watch the accompanying video.

Q: Is it looking like a revival in the upward trend for the market or is it too early to call it so?

A: For the last twelve sessions, we have hit resistance between 5,520 and 5,557-5,560 kind of levels. The world situation was contributing more towards it, which seem to be slightly better now than what it was in the last two weeks.

Yesterday's pullback was important. If it sustains the 5,500 on the cash side, then the close resistance levels 5,520 and 5,560 needed to conquer. If it manages to hold on and close over 5,560, it will be a sign that the market will breakout of this zone.

Then, the whole level of 200 Nifty points that we are trading from 5,400 to 5,600 would get from 5,560 to 5,770. It would be one leg up that would be a different range for trading.

Q: The one factor that provided strength in the market yesterday was the bank Nifty. How are you seeing it on the charts now? There has been a resistance on the bank Nifty at around 11,000 or so. Do you see us conquer that?

A: If we look at the strongest stocks, everything on the banking side looks good. The largecap banks like Axis Bank , ICICI Bank , IndusInd Bank ; the smaller banks like Kotak Mahindra have done well. Banks like Karnataka Bank and Bank of Maharashtra has really beaten down. State Bank of India (SBI) has shown all signs of a revival.

SBI, ICICI Bank and Axis Bank would contribute directly to the bank Nifty. Bank Nifty has been taking support around 10,700. It has been hitting resistance which is closer to 11,100 kinds of levels and between 11,125 on the future side where it takes resistance.

If it were to breakout of that, there would be no resistance for another 400 points, which is roughly about 3.5-4%. It contributes to about 20-25% of the Nifty would give Nifty at least a boost of 1-1.5%. Reliance is showing some traction moves up to the back to those 1,050 levels. If both of these work out, it would bring the market back to those 5,600 levels.

Q: How would you trade something like an Axis Bank now?

A: Axis did well yesterday. It was nothing exceptional, but at the same time, it had been 1-1.5% up. If you look at the futures, it is close to 1,320. The resistance works out to about 1,361 for day traders. A swing trader would look more at a target of closer to 1,392.

Stop loss for swing traders would be closer to 1,250 and for day traders, the stop loss would be at yesterday's kind of low which is Rs 1,290-1,292. This will poise at least 2-3% in the short-term. It is safe to trade on the positive side. It is not overbought and the momentum has just started. It would take it up pretty well.

Q: After being tempered for a while, IndusInd Bank is back on the gaining trajectory. How would you trade that one?

A: It was up about 3.5% on the futures yesterday. It was almost a breakout, as it wasn't closing over those 252 levels on the future. It has managed to scale up to about 256-257 and is close to around Rs 255. It was complete over the 10-20-50-200 day moving averages when the market was kind of below, so that it shows the strength of the stock.

At the current moment, the momentum can take it up to about 270. Stop loss for the swing traders would be of 247.50 and stop loss for the day traders would be similar to yesterdays of about 249. For the 247.50 level, any dip should be used for a buy and can be played till 270 for the momentum.

Q: Tata Communications did more yesterday than last year. What are the charts of that stock suggesting to you?

A: If we look at the monthly charts, the first signs show that it is bottoming out. It has moved up to 11%. We aren't aware of the news that has resulted in the news because it had a major resistance at 227. It has managed to hold on the futures and close about 245 levels.

The next resistance comes closer to 262-264. If it manages to hold on, one would book some profits there otherwise, the next target would be 280. It has moved up a flurry. If it manages to close below 233, then the stop loss should be strictly here. We haven't seen them move up for a long time, but if there is a nearest low, the traction is 262 and then 280.

Q: Capital goods have been showing some strength lately. JP Associates was up with 6% in the last three trading sessions. Are you seeing strength on capital goods names or at least a pullback?

A: It would be a pullback. BHEL and Larsen & Toubro (L&T) look better. BHEL has given traction for another 3-4%. JP has been oversold and has a resistance at 87.75. If it manages to hold on there, then it can do 4-5% and a target of 93 odd can be achieved.

On the other hand, I would buy something like a BHEL. The first formation of a bottom moving out of the ten day moving average has happened. It looks good at 1,994. If it can hold on to 1,960, one can buy it even on dips. The first target would be closer to 2,040 odd levels.

Q: The IT charts show some niggling worry about some sort of a breakdown with the way many of these IT stocks have been moving in the last couple of weeks. Would you trade them now or would you stay away?

A: Infosys was looking very weak. The trend was very discomforting, especially when it broke those 2,980 levels for a couple of days and went down. Yesterday, it managed to pull up over 2,980. Given the fact that it is able to come back from there, it would make a buying call. The stop loss would be pretty close to about 2,993, where it is closed.

The stop loss would be about 2,978 or 2,976. Once it manages to hold on closer to 2,980 levels, it will move sharply to the next level towards 3,080, which in trading terms would roughly mean about 4-4.5%.

Q: Sesa Goa the move up yesterday. Was it just an aberration because that stock has been down and out for a while? How would you track the other heavyweight like Bharti Airtel?

A: Sesa has made that bottom of about 256 earlier. This time, it recovered from that 256 closer to 280 levels and went back to those levels. It has kind of formed a double bottom and it is moving on. As long as it can hold on to the levels closer to 268, the stock would stay in a positive bias.

The first resistance it is closer to 282 kind of a level on the cash side. If it manages to hold 282, then we can see more momentum build up. Otherwise, there will be resistance there. It is an oversold stock and can pull up to 282. If it manages to hold that, then one can look at closer to about 299 levels.

On the other hand, Bharti has been in a range of 320-340 levels for a very long time. It has crossed over some of the moving averages and so the bias is definitely positive. Tata Communications has also done the same zone at about 1.25%.

Nothing major should be expected because it has closed at 330. There would be resistance at 336, which is about 2%. One should buy it only if it crosses 336 levels, with a stop loss at about 329, otherwise it will stay range-bound.

Q: Do you see traction on Reliance's charts at 1,050 or better than that?

A: Last time, it went closer to 1,055 odd levels. Last time, we were looking at a breakout which was above 1,008-1,009. For reliance 1,020 is a key level. If it can hold on to 1,020, then the first target would be 1,056.

It has to hold on to that because last time, there was a bad news which came in at the same time and the stock got knocked down in one single day. If it holds on to that, then one can look at higher targets closer to 1,100-1,110. As of now, the first target will be 1,020 and if it manages to hold that, then the target would be 1,056.