Mkt stretched, book profits in Tata Motors, DLF: Manghnani

ALSO READ See previous views by Anil Manghnani See what other Experts & Brokerages are saying about Infosys See messages about Infosys

Anil Manghnani, technical analyst at Modern Shares says the market will facing a lot of resistance  in days to come. The market is looking stretched with most stocks nearing their 200-day moving average. His top profit-booking calls are Tata Motors and DLF. Manghnani also says it will be difficult for IT sector to perform as the rupee benfit has been evaporating. share. He says the infrstructural sector is in the last leg of rally. There will be some short covering today.   IVRCL and L&T look little stretched on the charts now and he expects profit-booking in these two stocks.

Below is the edited transcript of Anil Manghnani's interview on CNBC-TV 18. Also watch the accompanying video:

Q: What's your prognosis of the Nifty now?

A: Yes I am surprised at the way it crossed 5067. The policy and the Bank Nifty have surpassed my expectations. They are all coming to some crucial levels with 5220 being the 200 day simple moving average. You have 5130 which is the 200 day exponential, you have 5161 which is the Fibonacci level, then you have 5220 and you also have 5265; that well defined channel of the last 15 months. So between 5130-5265, there is a host of Fibonacci retracements, trend lines and moving averages. So there's a cluster of resistances. So it's tough to look beyond this range. I clearly feel that market is looking a little bit stretched, yes there is a lot of short squeeze that has happened both on capital goods and banking. But we are getting to the higher end of the range because most of the stocks are also reaching their 200 day moving averages. Given that most of them, the 50 day is still well below the 200 day; it would suggest that now they need to start working their way down again.

Q: If you had bet against the market now, what would be your top short calls?

A: I think more than short, definitely profit booking. I am going for DLF and Tata Motors. If you see in the last three-four sessions, Tata Motors has not done anything much with rest of the market which suggests that maybe it is fatigued out. Rs 223-231 is a very tough resistance zone for Tata Motors to cross. It rallied all the way from August lows of Rs 137 and that's a pretty significant move. So you sell in this range Rs 221-231, expect a price closer back to Rs 200-190 range. Similarly DLF it's had a nice 9-10 day rally yesterday, made sort of Doji pattern on the chart which suggests that its finding resistance at this range. So Rs 218-227 is a sticky range for DLF with a move back to Rs 204 on the cards.

Q: Whichever of these two trading stocks you track and which one you think looks stronger from here, Idea and Suzlon Energy ?

A: Suzlon is still difficult one to call given the fact that it's been beaten down so much. Given what's happening to some of the other infrastructure and power stocks, Lanco has rallied from Rs 8-9 all the way to Rs 16 and GMR from Rs 18 to Rs 30. So a lot of them have moved 50-60%. Suzlon was a late starter in that regards and probably playing catch up. Maybe it will run till Rs 29-30 and then you'd find some selling pressure emerge. Idea is a different cup of tea; it had major support at about Rs 77. It's gone there, tested it and now bouncing. But around these levels of Rs 93-94 is the first real test for Idea. If it can take out Rs 94 then it can go back to Rs 103 which was the original recent top of three-four months back.

Q: How do you approach the laggard of this series IT. Would that become a buy for you now or do you think IT has done its bit last year?

A: No as long as high beta seems to be the order of the day it's going to be difficult for IT to perform and one of the main reasons for IT holding up in the last quarter was the rupee. But that too has gained from Rs 54 plus (to a dollar). It's trying to break below Rs 50. So that benefit also seems to be evaporating now. I still think there is a down side, maybe there's a split given the numbers. Maybe HCL Tech and Wipro may not fall as sharply as TCS and Infosys. I think Infosys may go back to Rs 2450 and TCS around Rs 1020. So you could see a split out there between the heavy ones and the not so heavy ones in Wipro and HCL Tech .

Q: What do you do with names like L&T, IVRCL which have been the stars of this series?

A: Very tempting to take profits. I remember you said one has moved 80%. I didn't even know that. Even Larsen from Rs 960-970 to about Rs 1350, maybe it will stretch to Rs 1400-1420. But they are in the last leg now. There may be some more short covering today but post that they seem difficult to move. So it's a tough one but you can go out and at least start booking profits as they look a little stretched on the charts.