Focus on stocks; consider Zee Ent, Tata Global: Manghnani

"On February 1 and then three months later on May 2 and then again three months later on August 1, on all three closing days, the Sensex closed precisely at about 17,300. We are trying to make so much of the index over the last few months; the index has the same play," he elaborated.

In this stock specific market, one can still look for stocks which are making 52 week highs or new life high. One can consider stocks like Zee Entertainment and Tata Global Beverages which have performed well.

"Look for pockets of strength within stocks and use any fall in the Nifty if these stocks start to correct that makes for a buying opportunity," he added.

Below is the edited transcript of Manghnani’s interview with CNBC-TV18

Q: What kind of a cut do you expect on the market after the global sell off that we saw yesterday?

A: We also had a decent run, 5,032 a sharp pullback all the way closer to 5,250. Even a 38.2% or a 50% retracement of the current move takes us back to about 5,165-5,140 sort of range. If we can go there and hold that then it sort of atleast sets a picture for a move back to that 5,300, which is the key resistance. But, it is quite interesting.

We have been talking about levels and directions for so long. I got an SMS yesterday, it is quite fascinating that on February 1 and then three months later on May 2 and then again three months later on August 1, on all three closing days, the Sensex closed precisely at about 17,300.

We are trying to make so much of the index over the last few months and you compare six months, whether it is February to May three months or February to August six months, the index has the same play. So pretty much it has become a stock specific market. There are still enough stocks making new 52 week highs or new life highs. The focus has to be stocks rather than the index now.

Q: Tata Motors has a bit of a comeback from Rs 205 to Rs 220, is it time to sell it again?

A: I would say atleast from a trading point of view, what worries me on the chart is 50 days just crossing below 200 day. That might keep the upside capped in the short run. This Rs 230 is a problematic area. So, maybe Rs 224-229 is a short, Rs 230 or above Rs 230 a stop.

A pullback into Rs 216-213 just from a trading perspective then I would like to see what it does at Rs 213. It might be some time before the stock comes out of the downward trend it has been in.

Q: Would you take any positions on the Nifty at all now or just stick to stocks and see if there is a bigger positional trend emerging anytime soon?

A: I would probably stick to stocks. I am still not getting a clear sense of a trend. There is enough support on the downside like I said first 5,140 and then major support at 5,060. Even on the upside first 5,300 and then just when you cross 5,300, if you take the 6,337 top and connect it to the 5,630 top and you draw a trendline you get about 5,370 today.

There is enough resistance on the top, enough support at the bottom. We are not going to make big money trading the Nifty and when the volumes are so low then you don’t even make great money on the option. Stocks are the way to go. Buy into strength.

If you look at the Zee Entertainment, it has moved quite sharply. If that starts to pull down that makes for a buying opportunity. Even Tata Global Beverages  has done reasonably well this week if that starts to come up a little bit that is another opportunity. So, look for pockets of strength within stocks and use any fall in the Nifty if these stocks start to correct that makes for a buying opportunity.