Even with rupee woes, Nifty wants a shot at 5200: Manghnani

Overall, the Indian market even with the rupee at 57, has suggested that it still at least wants to make an attempt to take out 5,200. For now Manghnani still believes there is a chance that 5,200 will be taken out. “I still maintain that if you are a short-term or day trader then still that 5,090-5,100 is your stop loss. But from a positional point of view 4,980-5,000 range still remains a key level,” he says.

Manghnani still believes that if the market is trading at the upper end of the range and 5,200 is the first hurdle, you can look at targets of 5,300.

Below is an edited transcript of his interview. Watch the accompanying video for more.

Q: Which key stocks on the index would you keep an eye on in order to confirm whether or not the market is looking set for a breakout?

A: I think banking would be the first pack. You are getting initial signs of fatigue on State Bank of India at about Rs 2,200-2,220 which was the key resistance level. It starting to slip and every time it goes there it finds enough selling pressure. The other one that had a great run was L&T but I still believe that Rs 1,375-1,380 is a problematic area.

Those two stocks were the main leaders in the Nifty and the Sensex. If they start to fall off or you start witnessing some serious correction out there, that may be the first trigger that the market is tiring out and wants to head lower.

Q: Do you track any of these NBFCs because it’s not just Manappuram. Yesterday Muthoot had a big move. What about the other faces - like the REC, PTC types?

A: I don’t track the smaller ones. We mainly go with the bigger names like IDFC, PFC, and REC. Most of them have rallied. We have been looking at IDFC all the way from Rs 115-120. Now it has already done a major target, at least one significant target at Rs 135. Maybe an REC can stretch to about Rs 187 and PFC to about Rs 175.

But now if you are going to buy them you’ll have to wait for a pullback in the market. I am not sure if I want to buy breakouts at this point. I’ll probably wait for a dip but just the way they have moves, I think all of them warrant a trade like a buy on fall. So REC, PFC or IDFC would be the first choice.