Nifty to hold 5600; buy liquid largecaps on dips: Edelweiss

"If the Nifty breaches 5,800 mark, we will have that next 100 points move very quickly. The trend still remains bullish, a bit of consolidation before we move higher," he added.

Indian equity benchmarks witnessed a volatile start today following a fall of about 400 points on the Sensex since the start of this week. The Nifty declined 8.25 points to 5,643.90.

At lower levels, banking and capital good largecaps can be bought. " ICICI Bank and Axis Bank are good levels to accumulate on dips. You can look at L&T and BHEL at lower levels. Stick with more liquid largecap names, better stocks and good management," he suggested.

Below is the edited transcript of Badkar’s interview with CNBC-TV18.

Q: The October series has not begun very well, there is a mild air of correction, do you see that deepening as we wade deeper into the series?

A: We have had a great September and if you see the current Nifty levels on the spot, post the September expiry we haven’t done anything. We closed at around 5,649 on Thursday and today we are at around 5,652, we may get a bit of a gap-up opening today, but my sense is that overall after the big move that we have had in the last few trading sessions, now it is a time for consolidation.

We are also moving into a result season starting tomorrow with the big ones coming out. It will be a little volatile, 5,600 by and large should hold. I do not see it breaking that easily because if it does and there is a concern, you have those gaps that have to be filled in you can all the way go down to 5,450 if that 5,600 mark is broken. I do not see that happening.

By and large you will see the Nifty consolidating between 5,600 and 5,800. Once we cross 5,800, we will have that next 100 points move very quickly. The trend still remains bullish, a bit of consolidation is likely before we move higher.

Q: If we do see a move lower, which are the stocks that you would go ahead and buy at lower levels now?

A: It is good to stick with the largecaps. You have those two gaps to be filled below 5,600 and you can correct all the way to 5,450. In that scenario, you would want to be with the largecaps.

Within the largecaps, I would like to stick to banking, ICICI Bank and Axis Bank are good levels to accumulate on dips. In the capital goods maybe you can look at L&T and BHEL at lower levels. Stick with more liquid largecap names, better stocks and good management.

Q: How are you approaching infrastructure because yesterday it seemed lot of these infrastructure names actually saw some fresh short positions being built?

A: That is right. Initially, we saw longs being built then we saw those longs being cut and fresh shorts coming again, which is why I would not want to go into infrastructure stocks immediately because we are at quite a critical juncture where if we fall below 5,600 levels, we can get that quick 3-4 percent downside on the index. That is quite unlikely to happen, but if that were to happen then you will see infrastructure stocks correct even more sharply.