4860-4880 is a key resistance for Nifty: Anil Manghnani

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4860-4880 is a key resistance for Nifty: Anil Manghnani

Anil Manghnani, Modern Shares & Stock Brokers says, 4,860-4,880 is a key resistance for the Nifty. “I wouldn’t want to take a fresh call, unless I see that decisively being taken out,” he adds.

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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 Larsen See messages about Larsen Larsen BSE | NSE 29/05/12 Are Mutual Funds betting on Larsen? Other Stocks in this news ICICI Bank | Axis Bank | State Bank of India | Dr Reddys Laboratories | Sun Pharmaceutical Industries | GlaxoSmithKline Pharmaceuticals | Tata Consultancy Services | Infosys |

Although the market was subdued yesterday, the Nifty managed to hold 4,800. Anil Manghnani, Modern Shares & Stock Brokers says, 4,860-4,880 is a key resistance for the Nifty. "I wouldn't want to take a fresh call, unless I see that decisively being taken out," he adds.

According to him, current upmove is a counter trend rally. "Right now, I don't have substantial evidence that suggest that 4,531 is the bottom," he adds.

Also read: Short-term trend is still up, says Sudarshan Sukhani

Below is the edited transcript of his interview with CNBC-TV18's Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.

Q: What did you make of yesterday's session? Should the trading stance for a Nifty trader still remain on the long side?

A: It hasn't broken down yet. True that 4,860-4,880, which I mentioned a couple of days back, is the key resistance. So, there is no surprise that it has found some selling pressure out there.

It's good to see on a day that Infosys was down 8%, TCS nearly 4%, you still had the market more or less close flat. So, you are getting support from other stocks that have been beaten down.

I think there is some positivity coming back. You have foreign institutional investor (FII) numbers now beginning to inch up. Also, one thing there was not much premium on the Nifty futures. But yesterday in a falling market we saw the premium widen. So, I don't know if that's a case of more people buying or more buoyancy in the market. But atleast you want to see a bigger premium in the markets moving up. So that's encouraging.

A lot of index futures are being cut by FIIs on the futures and options side. That is good. But I am still looking out at 4,860-4,880 as a key resistance. I wouldn't want to take a fresh call, unless I see that decisively being taken out.

Q: Are you still classifying this is a counter trend rally technically and nothing more significant than that?

A: As of now, it's too early to call it more than that. The thing that has surprised me the most is if you are calling 4,531 as a bottom and we are in the beginning of a new rally, it's very rare you see the first rally where midcaps and smallcaps outperform largecaps.

If you take some of the infrastructure names or sugar names, they have gained 30-50% in the last 15 days. So that's a little strange for a rally that's starting off, if you are classifying it as a new move. That's concerning. I'd like to see largecaps lead first before you get midcap and smallcaps. So, I'll still say it's a counter trend rally. Right now, I don't have substantial evidence that suggest that 4,531 is the bottom.

Q: Do you think L&T 's run is coming to an end?

A: Atleast a pullback. The stock has moved from Rs 970 all the way to Rs 1,170. That's a Rs 200 move. That is pretty big. Rs 1,170-1,180 is the 50-day moving average. That traditionally on the first bounce should work as a resistance. So, I feel the stock would come back to Rs 1,095-1,070 levels.