Anil Manghnani sees Nifty support at 5350; suggests buys

"If you are taking the next bigger long call on the Nifty, it would have to be above 5450 or then on a pullback may be closer to 5350 or so because the trend line support now is at about 5350-5340. So anywhere closer to that with may be a 10 point stop would be the order for the day," he says.

Below is an edited transcript of the interview on CNBC-TV18.

Q: What's the view on the index now?

A: We spoke about 5450 on Wednesday. So I am not surprised that we found some sort of profit taking, some sort of genuine selling yesterday at those levels. And even the world markets, although they haven’t really given any clear indication of a breakdown, but they also are seeing after such a massive rally, some sort of profit booking.

That seems to be the order of the day and if you are taking the next bigger long call on the Nifty, it would have to be above 5450 or then on a pullback may be closer to 5350 or so because the trend line support now is at about 5350-5340. So anywhere closer to that with may be a 10 point stop would be the order for the day.

Q: How is IT looking on the charts, the CNX IT or any of the frontline stocks because they pulled the Nifty along yesterday?

A: TCS is interesting and has been the confusing one for me. Every time I thought may be it should correct, it starts to go up again. The general consensus in the market is there is no other alternative as so much selling has happened in Infosys over the last six months, so it seems a lot of that money continues to go into TCS.

TCS now is in a fresh breakout above Rs 1300, may be Rs 1370-1400 could be the next range. HCL Tech will also benefit in this IT move and could head closer to Rs 600.

I am not overly convinced with the Infosys move. I still think this is a selling zone between Rs 2,450 and 2,550. So, I’d look to book profits. Wipro is also just seeing a technical pullback similar to Infosys so around Rs 373 becomes a sell.

Q: From the midcaps which have gone up, you have chosen Voltas from a trading perspective today?

A: Yesterday’s move was a breakout above Rs 113.50-114 and there were good volumes also. In the last 2-3 days the stock was just drifting down, there were volumes. But yesterday with such a big move and great volumes it convinces me that there is a lot of move left in this.

So with a market gap down you might get a little closer back to Rs 114. I think Rs 114 to Rs 119 is a good buying range and Rs 107 should be kept as a stop. I have kept it at Rs 126 but in longer term this is setting up for a bigger move.

Q: Does ADAG still look weak to you?

A: I have picked Reliance Power as a short because you have a market that is at a 5 month high, but RPower now is at a 7 month low. This is a divided market where if you are at a low you keep getting hammered and if you are at a high you keep rising. It is a strange bull phase that the Indian markets are not used to.

Normally we get where everything tends to move. But there is a clear divide in the market. Going with that theory that if something is broken down, it will continue to fall, I have seen over the last 3-4 months may be Rs 87-86 was a major support. But having broken down below that the stock is headed towards Rs 77-75.

Q: What do you think; we’ll just keep ranging in 5350-5450 band for a couple of more days?

A: Yes I think so. I don’t expect the US market just to fall off. Normally after making a new high may be 2-3 days correction then again the market tends to bounce back, make a lower top before it falls and continues its rally. You’ll have to give it a couple of days to see even how the world markets pan out before you get a clear direction.

For now I would probably take a call only if we broke above 5450 for the next big move. If I had to go short, then probably wait for a close below 5350 and then take that next call. So, we are stuck in this 100 point band before one can take a clear directional call on the market.