Feb 21, 2012, 12.17 PM IST | Source: CNBC-TV18

Fresh moves in FMCG, pharma can help sustain mkt: Anu Jain

In an interview to CNBC-TV18, Anu Jain, senior vice president at IIFL Private Wealth Management says the technical charts show that the IT sector is probably giving a fresh breakout.

Anu Jain, Sr VP, IIFL Pvt Wealth Management

In an interview to CNBC-TV18, Anu Jain, senior vice president at IIFL Private Wealth Management says the technical charts show that the IT sector is probably giving a fresh breakout.

Other sectors like FMCG and pharma are seeing some momentum. “You will see a fresh move coming into these sectors which would probably sustain the market at these levels,” she adds.

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

Q: We touched that 5,600 mark intraday on Friday. What are you expecting to see this morning on the Nifty?

A: If you were to look at the Friday close, there were some distributions, some kind of sales which was visible at the 5,600 level especially on the metal side obviously because people were apprehensive of what would happen. The way Hindalco and Sesa Goa closed if it opened down there, it would be a sell signal but given that everything is positive you could see metals and commodities take-off from here so 5,400 continues to be a support.

First resistance on the charts now is about closer to 5,690-5,700 and that’s a less than 2% kind of a move. We have seen market move up steadily. If the market has to sustain over 5,600, some of the defensives may start playing up again. We saw that probably IT is now giving a fresh breakout as a sector. I do continue to say that your infrastructure, midcaps or real estate will probably go on to move but you will see the momentum now coming into FMCG, Pharma and IT. You will see a fresh move coming into these sectors which would probably sustain the market at these levels.

Q: The mood seems to be inclined towards the fact that the expiry will probably be towards the highest point for the index. What's your expectation from the next series in terms of a range that the market could settle in?

A: I would hope that you don’t get a squeeze over the last two-three days of this session because that will not augur well for the market to move up, shorts cannot be squeezed out completely at any level. There has to be something left for the next series. If you get squeezed and you move to 5,700-5,750 early that means in the next three-four days before the expiry, then the next expiry will become quite dull and insipid.

You may survive those levels or come down and have a correction but if you were to side off marginally correct lower from here because all the news is in the price then the movement could probably be to up to 6,000 levels. I know it’s completely unbelievable but that’s how the charts are reacting that if 5,700 gets taken off and it sustains then you could move up to 6,000. That could be the squeeze in the next series.

But the whole point is it would only depend on how much of a squeeze we get between now and the expiry because the more you squeeze them out in this series the less exciting the next series would become.

Q: A trading call from you on Petronet LNG ?

A: This is a stock which has consolidated very well around those Rs 165 levels for a very long time and now it's giving a breakout. The breakout has happened around the Rs 170 level and that should be a stop loss. As a swing trade it's poised towards between Rs 185 to Rs 189.

Q: You have a buy on HCL Tech this morning. It's seeing a little bit of pressure. What would the call be there?

A: The way they have closed on Friday, whether it's Wipro or Infosys, on the charts they both are giving a fresh move up along with HCL Tech. So HCL Tech closed around those levels essentially at about Rs 492 support. I would buy the dips up to Rs 480 because Rs 530 seems to be where it's poised. This is a swing call; this is not a call for a day or two days. There is scope to buy the IT sector on the down move if any, today or tomorrow.

Q: The one niggling worry in the rising market has been the way Reliance has moved. Last week the market moved up 3% but Reliance was down 3%. This morning as well indications are that there may be a move in the red. How would you trade Reliance now?

A: I have been negative on Reliance. I had played Cairn versus Reliance over the last one month. I continue to hold a very positive view on Cairn. I had said you could play long on Cairn and short on Reliance. The way it closed on Friday I think it's close to support so at about Rs 818 where it closed it's taken support and bounced off.

I won't be negative at this price on the counter but I would really be bullish only if it crosses essentially those Rs 830 levels and holds that level because it's not been able to cross Rs 826 and hold it. If it holds that then it could attempt Rs 860 but as of now at these levels it's at support. If it were to break this Rs 818 then there is support at Rs 800 which is 2-2.5%. So around these regions it's in the support zone.

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