Mitesh Thacker's top 5 picks for trade today

Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by Mitesh Thacker See what other Experts & Brokerages are saying about Shree Renuka See messages about Shree Renuka Nifty BSE | NSE 29/05/12 Are Mutual Funds betting on Nifty? Other Stocks in this news ICICI Bank | Jaiprakash Associates | JK Lakshmi Cement | IndusInd Bank | Hindustan Unilever | Kingfisher Airlines | Jet Airways | ABG Shipyard | Bharati Shipyard | National Fertilizers | Fact Enterprise | Chambal Fertilisers and Chemicals | KRBL |

Here is a verbatim transcript of the exclusive interview with Mitesh Thacker on CNBC-TV18. Also watch the accompanying video.

Q: What about the Nifty? Are you confused or do you spot a clean trend up or down for the market now?

A: Broadly, the trend still remains down. We have had a bounce back after the Nifty fell around 500 points, it was quite oversold. I have been talking about it saying the fact that the five day Relative Strength Index (RSI), the seven day RSI were into single digits. So we saw good pullback which lasted for around two days but the Nifty clearly failed to get pass the critical level of around 4,950 which everybody has been talking on the street. So I think very clearly the price action is signaling that the downtrend is not yet over. As of now if you look at the intraday charts, the previous bottoms were around 4,800-4,820.

So as long as we remain above 4,800, probably we might spend some more time in this range of 4,800 and 4,950 but overall over the next few days, if you take a 10-15 day kind of horizon, it probably looks like that we will go and test the 200-day moving average (DMA) which now comes at around 4,630-4,640.

Q: What about the shipyard companies, they have been running up continuously, will you draw the line here or do you think they could be rerated further on the way up - ABG and Bharati ?

A: Both of them ABG and Bharati look pretty good. I think they are enjoying very good run, the momentum is still good, we have not seen any kind of weakness in trends. Everyday with the price action we are seeing activity happening on the volume side also. The only problem here is that now they have run up a bit, so I think they might take some time, take a breather along with the fact that market is not exactly going up strongly but otherwise I think the individual price strengths for both these stocks remain pretty good.

I am waiting for a breakout of Rs 330-340 on both ABG and Bharati. Once this price levels or the decent highs have been cleared, I think you will see the uptrend come back into force, price moving up smoothly and I think both of these stocks can easily test levels of around Rs 400 and above.

Q: Any thoughts on fertilisers that is another sector, which has been outperforming?

A: We still continue to like this sector. There are a few stocks like NFL , FACT which are looking very good. They have broken into all time highs and are still doing very well. The only thing which can happen over here is that after a good rally, they are liable for some kind of profit booking which might come in especially if the market is weak. So I think on declines these stocks will remain a good buy. In the frontline segment or in the F&O segment, we will look at Chambal Fertilisers .

Once it get pass the highs of Rs 72-73, which is where this stock has been topping out every time in the last five-six months, beyond Rs 73 it can probably look for targets of around Rs 80-82 but otherwise the preferred stocks or the ones which are looking the strongest are in the cash segment as I named them - NFL and FACT still looks the best of the lot.

Q: The other problem heavyweight is Hindustan Unilever . That stock is down nearly 7% in the last three days. What kind of levels do you see there?

A: In fact on the entire fast moving consumer goods (FMCG) sector, there is a possibility that the BSE FMCG index would have made a head and shoulder formation which is a bearish pattern. We are seeing a similar kind of price pattern happening on the chart of ITC. So very clearly this is one sector which has now gone in the underperformance mode as well as the fact that absolute prices are also in some kind of a downtrend plus we are seeing negative price patterns developing on charts.

I think particularly talking about Hindustan Lever we are looking at a target of around Rs 222-220 which is where the strong support will come from weekly charts. So I think the entire decline which started from levels of around more than Rs 270 could take a breather or could stop at levels of around Rs 220.

Q: Have you had a look at the two aviation stocks because they had a brief period of strength but they are beginning to weaken again: Kingfisher and Jet ?

A: I have looked at both of them but the stock which I like is SpiceJet. This stock has been making new highs, still remains in a good uptrend, as I mentioned earlier it is making higher highs and higher lows. I think as long as the stock remains above Rs 54, the uptrend would remain intact, the upside targets could be around Rs 62-65 in the short-term.

Kingfisher on the contrary looks slightly weak, Rs 52-51 is a good support area, I think that is where the 200 day moving average (DMA) is also there. Once it breaks that, probably the stock could decline further.

Q: You track any of these rice stocks?

A: Yes. In fact, we have been looking at KRBL . That is the stock which has broken into new highs. Typically, what we have seen is that any stock, which has broken into a new high or uncharted territory over the last few months has gone off and at least recorded 30-40% in advance - Sesa Goa, Jindal Steel & Power are few common ones, which come to mind.

Again over here, I think the breakout is very good and excellent which has happened with extremely high volumes coupled with good fundamentally positive news. This uptrend will continue and declines to levels of around Rs 230-225 would be excellent time to again get into fresh long positions for people who don't have this stock. I think on the upside Rs 300 would be a good short-term target.

Q: What do you expect for the rest of the day, we have started around 4,870, do you think it will be mirror image of yesterday - the morning is okay but the afternoon turns tricky or could today surprise on the way up?

A: I don't think so. If we are talking particularly about the day, we might inch up slightly higher as Europe opens around 1-1.30 pm. We might test levels of around 4,895-4,900. But I think on the downside, the fall will come only when we break below 4,820-4,800 levels. So maybe for next few days we might be trading in a range bound kind of a market.