100pt rally on cards if Nifty closes above 5067: Manghnani

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100pt rally on cards if Nifty closes above 5067: Manghnani

Anil Manghnani of Modern Shares and Stock Brokers tells CNBC-TV18 that the Nifty could rally another 100 points if it manages to close above the 5067 level.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Anil Manghnani See what other Experts & Brokerages are saying about Reliance See messages about Reliance

Anil Manghnani of Modern Shares and Stock Brokers tells CNBC-TV18 that the Nifty could rally 100 another points if it manages to close above the 5067 level. "However, most stocks have hit their major levels, so I think a pullback is more on the cards," he adds.

Below is an edited transcript of his interview with Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.

Q: What did you take away from the market yesterday the way it traded flat and how are you positioning yourself for the Nifty?

A: Yesterday was no surprise given the fact that most of Asia was closed, but being an expiry week and with the RBI credit policy, I was expecting little bit more volumes, so a little disappointed on the volume front.

The key level remains 5067; if you are looking for the next move in the index it is only going to come above Rs 5067. If it can cross and close above that, then you are looking at another 100 points. But it will be a little tricky for the market a lot of stocks have hit major levels. I got a little wrong on the Bank Nifty when I said 9200, it has crossed that but at 9600-9700 it is running into a cluster of 200 day moving averages.

I think pullback should be more on the cards, so I would look for profit booking right now. But strictly from a Nifty level point of view, watch for 5067 because post that there is another 100 points move on the upside.

Q: What did you make of the way the market chose to react to some of the results on numbers like Sterlite , Maruti and L&T ?

A: If you take some of the stocks from yesterday, especially the results one, I think the weakest definitely was Sterlite. I think the way the stock has fallen post its numbers suggests more downside. The stock has rallied with the rest of the market, so I think Sterlite remains a short term sell. It is headed towards Rs 102 and Rs 98 on the downside.

If you take some of the bigger ones that moved actually post the numbers, I think the first one to talk about is Maruti. It consolidated fantastically between Rs 900 and Rs 960 and now it's broken out. It has an unfinished target of about Rs 1210-1220, so I think if you are holding that you should continue to do so.

L&T is another interesting one; it did fall before the numbers, but rallied post it. But having rallied from Rs 970, the upside seems a little limited now. The key level to watch out will be around Rs 1310-1315 mark, so it may be a little range bound. Look for a breakout only above Rs 1315 and if you are looking for a bigger correction in L&T then if it breaks Rs 1225-1230 on the downside you can expect some more correction.

Q: How would you trade Reliance now?

A: I think everybody is keen on RIL post its disappointing numbers on Friday. Sure the stock will get some short term relief based on the buyback, but I don't see any major movements in either direction. O the downside I think Rs 757-730 will be the key support levels to watch out for. On the upside Rs 792 still remains the key resistance. If it can take out Rs 792 on the upside and then move towards the 200 DMA, which is placed at about Rs 835-840, it could be the order of the day for RIL.

Q: What about Kotak Mahindra Bank which you track closely?

A: I was negative on the stock, but it has surprised me by crossing Rs 480 and rallying all the way to Rs 500. The sharp reaction yesterday post the numbers tells me that this stock really needs to do something on the downside. It has not corrected in the same manner as some of the private banks have done in the last year.

So I think this Rs 480-500 range is a congestion area where it will find a lot of resistance. If it's in that area, it is a sell for me. In this move I can see it back at about Rs 450-445. But I think even on the medium term point of view this will be one of the top sell for me this year in the banking sector.

Q: Today real estate stocks might be in focus. How are you trading DLF ?

A: The stock has been in an upmove all the away from the lows of Rs 172, continuously moving up with the market. But having said that, it has now come to the first key resistance around Rs 221. Also, the 200 DMA is placed out there and that traditionally has been sort of resistance area.

So if you bought lower, I would look to book profits in DLF and wait for a pullback. The stock has already moved up by Rs 50, so it should come back and settle around the Rs 200 mark eventually. So I would look to sell out here and again buy the fall.