Expert take: Which 2 banks does the market have its eye on?

Below is a verbatim transcript of his interview with CNBC-TV18’s Mitali Mukherjee and Udayan Mukherjee. For the complete interview watch the accompanying video.

Q: What kind of trading stance would you hold for at the remainder of this series?

A: It is an important week. You are close to that 5,900-5,950 very important resistance. Market needs to start to take that out. If you look at the whole series, net-net we are up about a percent from what we closed in March. But within that two-three week period, we have had quite sharp moves up to 5,700 and back to 5,900.

So there has been a 200 point swings in both direction and quite fast. Given that we have earnings also, a lot of them should be coming out this week, plus the expiry could be interesting. We have momentum on our side, we have liquidity and clearly the dollar weakness globally is fueling the commodity and the equity rally. As long as the dollar remains weak, the foreign market should be supportive but, for us, 5950 remains a key level to break now.

Q: What do you think will carry the Nifty if it has to get passed that level? In that context how is the Bank Nifty looking to you?

A: Given that there was so much concern about TCS , given what happen to Infosys , now that is out as a way and no surprise is out there. Even Reliance , although the results have not been good, it hasn’t been a stock that really has done anything for the market over the last two years. I don’t think that too many positions are out there to be worried about.

But clearly the two big banks are left - SBI , the reason being is it hasn’t done anything over the last two months or so, where some other banks have really rallied. It is right at its crucial 2,870 is the level. If it takes that out, it has got potential to go to 3,000 and 3100. So SBI is the key one and even ICICI Bank , although it has rallied from 930 levels, over the last couple of weeks it is just hanging around that 1,100 mark. 1,150-1,160 is the key resistance. I think that is another big one. Those two should be the next two that the market would be looking forward too.

Q: A bit of weakness in the infrastructure plays on third stage - GMR slipped off, BHEL came down quite a bit. Is there any weakness that you are spotting on the charts?

A: This has been the weakest sector. When we had that big fall in January-February, this was one of the sectors that really took it on the chin. Yes, they have bounced back, but they have hit some key levels. We talked about BHEL, Rs 2220-2250 being a key level; it has fallen exactly from there.

This sector, especially, infra more than the capital goods, early signs that maybe on a longer-term front, the worst is over. But it could be a period of still a three-six month of consolidation, maybe the lows of February may get retested eventually but they could trade.

Like a GMR could trade in the 30-40 for a few months and then break out. Another one as a long-term play is Suzlon. The worst may be over, but it could spend sometime in this 45-60 range before moving up. Yes, these infra’s look having done on the downside, but to say that they are going to run away right away might be a little early. They may be in that consolidation phase right now.

Q: If the market again makes a failed attempt to breach that 6,000 mark, how would you read it as a technical analyst?

A: If it didn’t break this week, it wouldn’t really bother me. My view was for the whole month. You are coming off a 10% upmove in the month of March. Even if you get a sort of a consolidation month like we have seen in April, yes, there has been volatility, but after a 10% upmove, a lot of the good news of the earnings season was already in the price.

So you were going to see some certain disappointments like you saw in Infosys and a little bit in Reliance. The market needed its break and needed a one month pause where to absorb all the earnings. We have headwinds in the form of crude, but there it is more a dollar play, it is not so much the demand, it is just that all commodities are rising because of the weakness of the dollar.

Maybe we see out this week in this range only where we have been stuck in between 5,700 and 5,950. I am keeping my fingers crossed, because normally if you go back over the last 10-12 years, on even years, May has been a bad month, but on odd years which we are in 2011, May has been maybe not a breakaway month, but it has been more positive than negative.

So, maybe after a consolidation through the April series, May might bring in a nice positive surprise which is possible. If we don’t break 5,950 this week, I don’t think it is a major thing. As long as we have consolidated after a 10% move, that is good enough for the market.

Demand environment good; Expect decent growth in FY12: TCS