Market to gain momentum if Nifty conquers 5200: IIFL

“If 5,200 is conquered, then you will see strong momentum build up,” she said in an exclusive interview to CNBC-TV18. She further adds that momentum may build up such that the market moves up to 5350 levels.

On the chance that the market continues to trade in a tight range below the 5200 mark, Jain says we can retest 5000 again.

Below is an edited transcript of her interview with Udayan Mukherjee and Mitali Mukherjee. Also watch the accompanying video.

Q: How are you approaching the market in the run up to the expiry and given what you have seen on the Nifty in the last week?

A: It’s been a bull and bear fight to say the least. The market has been resilient, but the momentum that I was expecting or anticipating hasn’t come yet. Every time the market managed to close over 5,150 or closer, we either had a gap down or negative news the next day.

It happened on Thursday, where we had a candlestick formation but a gap down on Friday. It showed resilience and got back to the 5,150, but a lot of scrips did get battered in the process.

So closer to 5,195-5,200 is where the resistance is. Momentum will come as soon as it manages to hold those levels. Whether it’s before expiry or after expiry, it’s only when 5,200 is conquered that you will see strong momentum build up. If we can manage to do that, then 5,350 is more likely on the charts.

If it continues to trade the way we are now, where it doesn’t catch momentum beyond 5,200, we can go back to test the 5,000 levels once again.

Q: How are you approaching the banks technically, the Bank Nifty or any individual banks?

A: The Bank Nifty has got great positive bias and that’s one of the reason that I have continued to be positive on it. If you are looking at resistance, it’s only a couple of percentage points away at 10,330 odd. There is support now at 9,970, which is 0.5% down. The majority number of buy signals on Friday were all in banking, be it PSU or private.

The surprising thing is that one was expecting the private banks to pickup first but it’s PSU banks which are holding up and looking more positive. So Andhra Bank , UCO Bank , State Bank of India and Karur Vysya Bank on the private side, all have a positive bias of about 2-5%.

That is one of the reasons why my underlying bias is positive. If there is a 3% gap between now and resistance, that itself if its 27-28% move on the market of the Nifty constituent which can take 1-1.5% higher which is 5,200.

Q: Two midcap stars Educomp and Manappuram Finance ?

A: Manappuram Finance has fallen so much that the move from here is welcome as a move ahead. I think it’s consolidated and probably at these levels it is a hold. I think if I were to hold Manappuram Finance with a stop loss of closer to Rs 24 I would see a move up to about Rs 30.

I won’t be able to comment on Educomp because I do not track.

Q: You have a trading buy on Biocon today?

A: This is a pharmaceutical stock which has taken a batting down, taken support and now consolidating. So at Rs 232, where it closed last week, it becomes a buy. I would use dips till about Rs 229-228 with a stop loss of about Rs 225- 226.

I think the immediate target is Rs 243 even as an investment stock playing up to Rs 280 I think it’s a good stock to hold on to. So I would be both trader and investor into this counter at this price.